Closing Bell - Closing Bell Overtime: Believe the Bounce? 05/23/22

Episode Date: May 23, 2022

Dow and S&P 500 climb nearly 2%, but can investors trust the rally? Liz Young from SoFi weighs in. Plus, Pete Najarian joins to talk about whether it is time to buy financials or not. And, Michael Santoli’s “Last Word” is “déjà vu.”

Welcome, everybody, to Overtime. I'm Scott Wapner. You just heard the bells. We right here just getting started in just a few minutes. We'll get Zoom's latest earnings report, a real-time temperature check on those once high-flying tech stocks. We will have the color, the instant reaction, and, of course, everything you need to know about that. We do begin, though, with our talk of the tape, the bounce, whether it can last for more than a day or two. That's what it's come to. All we're asking is for a day or two. Let's ask Liz Young, SoFi's head of investment strategy. It's good to see you. We're shell-shocked, so we'll take it thus far. But you hear me on that, though, right? Like, you get where I'm coming from. I do. And, you know, we're coming off of four straight weeks

where we had at least one day a week with more than a 3% drawdown in the S&P. So it feels great to have an up day like this, but it also feels like the whipsaw continues. So if I want to try to make a bull case, the bull case is that we'll have rebalancing that'll happen in the middle of the year. That should cause an inflow into equities. We have, hopefully, confirmation that we aren't in a recession. We'll have inflation that'll cool. The problem is we won't have any of that until late June, early July. See, I was thinking as you were saying all that, so what does that mean for me right now?

Am I kind of in no man's land of waiting around for a positive catalyst that I can't really see in front of me? Yeah. Well, so here's what I would say to that. This kind of environment where you've got the whipsaw and ups and downs that are so big is a trading environment where it can feel on any given day like you were wrong yesterday. And that is ripe for mistakes. So you have to be careful here. If you are going to trade it, make long term trades only. But still right now, and I know this isn't a popular opinion, it's OK to wait this out a little bit longer. It's OK to leave it in cash for a while. So I'm curious as to whether you think that things have gotten too negative too quickly. Right. We went from it feels like in an instant from pricing in rate hikes to

pricing in terrible recession. Yeah. And the stock market felt so jittery about that. Then Jamie Diamond makes some comments today that have been cited numerous times throughout the day at the investor day. U.S. economy strong storm clouds that may dissipate. They affirmed their target for their returns this year. He was certainly a little more positive than he could have been. And he wasn't. What does it say? So I don't know that we've entirely priced in recession because the S&P never got into bear market territory. If we were pricing in a recession, we should be down 25, 30 percent in the S&P. Oh, I don't think we we have priced it in. What I'm saying is that it feels like we went from pricing in rate hikes to making the huge

leap of now trying to price in, trying to a recession. Gosh, I don't think if I don't think we price that in yet. Right. But I mean, it feels like things have gotten a little more unstable as a result of the change of what we're trying to price in. Yeah. And I think the market's trying to figure that out. In the second half, will we have a recession? I don't think we will. And then what you'll see is because we've gotten down this far, once we confirm, like I said, that we aren't in a recession, you'll see a little bit of a cyclical bounce. And that's where I think the second half ends up being better than the first half. But we still have five weeks of the first half left. So, I mean, let's go quickly where I started the conversation, right? You get 600 points on the Dow today. We've been so oversold. A lot of people have been saying this is due, but you still don't

have a lot of believers in it. Can you think, do you think we can put a couple of days together or there's just going to be too much selling into this positivity for a day? No, we can put a couple days together. But again, that's coming off of four pretty painful weeks, right? And that's usually what will happen when you're in a trading range. You have a bunch of pain, a little relief rally, and then we go back to pain. It's going to stop when we can finally not have those big 3% to 4% down days. I'm trying to wonder, you know, at this point, what's allegedly, use allegedly for obvious reasons, on sale? If you look around the market and you say, you know, at this point, what's allegedly, use allegedly for obvious reasons,

on sale. If you look around the market and you say, you know what, I'm never going to pick the bottom, so why bother? But XYZ stock gone down too much. If I'm a long-term investor, why not layer in, as Oppenheimer says today, to places that they say are on sale? Then I look down, what about tech? What about mega cap tech? Yeah, absolutely. So thinking about how far the market is down already this year, there has to be cash sitting on the sidelines because it didn't go anywhere else. So this is the time where you drip in. And I would really be careful about the dripping, though. I would drip into the queues. I would drip into high quality tech. I think we're going to look at

this three to five years from now and say that a lot of these names were really good bargains. I think you can also drip into spaces like biotech. You can drip into health care, and you can get comfortable there. If you want to be risky, the bold call for the second half of this year is a cyclical bounce, and then that, for me, is financials and small caps. But it's going to take, like, a big leap for that because I was going to come back and say, what about the financials? Right. Diamond's talking not so negative today. Jane Frazier was on. Of course, the city CEO was on with Sarah earlier today, said bank stocks are undervalued.

I do think they're undervalued, especially if we're headed for a relief that we didn't have the growth scare. It didn't come to fruition like we've been afraid of. And financials could have a much sunnier second half. Small caps have really gotten beaten up and they should. They're a higher beta group, but they've gotten beaten up to the point that if we come out of a growth scare unscathed or relatively unscathed, they're due for a bounce. Are you worried about defensives at all? Because the conversation feels like it went from a place of safety those stocks have all been doing well until walmart came out and then they got knocked out onto the canvas and then target came out and they got stomped on when they when they were down i'm speaking of the staples defensive trade now you have some people saying you know the last winner if you will energy

they're going to come after it. It's just a matter of time. Yeah. So I'm not worried about defensives in the sense that they're all going to get hammered. I think I would put Target and Walmart into that consumer camp and consumer discretionary and just consumer sensitive names overall, I think still have to come down further because the consumer is just now showing signs of cracking a little bit. And in order for inflation to fall, we need demand to fall. If demand continues to fall, those consumer names are going to get hurt. What we learned last week is that companies can't adjust as quickly as consumers can change their behavior. So we're going to still see some right-sizing of consumer earnings, consumer prices.

I don't think, though, that that's a signal that the defensive play or the dividend payer play is completely over. I think there's still a reason to have that in your portfolio. You're getting Fed speak this week, Bostick today, you get Powell, I know, but now, you know, any week that Powell speaks is important, right? And you're going to get Powell tomorrow. You get the minutes on Wednesday, which don't really mean all that much because they're backward looking. We kind of know where the Fed stands. Their message is being heard loud and clear, I think it's fair to say, by the markets. But you maintained, you know, a few weeks ago that you thought maybe the Fed would do a dovish pivot of some sort at some point this year. You still stand by that? I do. It'll feel like that. It

won't look like that in the grand scheme of things. But because they've set us up and prepped us for such hawkish action, I do think that if inflation cools off and we can confirm that, let's say July, August, and if growth starts to slow down, the consumer starts to show some cooling that, yeah, then they'll they'll kind of retract their claws a little bit. And then we don't end up in the same place that we thought we would at the end of the year. OK, hold your thought for a second. I told you that Zoom earnings were coming out. In fact, they are out. We're going through the numbers as we speak. I promise you we'll give you the instant stock reaction. Our reporters going through the

release as well. You bear with me on that if you would, and I'm going to get you all the information you need on what is a pop in that stock. A pretty important report, don't you think? Just given where we've been with some of these high flying stocks, these so-called stay at home names that have gotten absolutely trounced over the last many weeks. Well, this one, at least on first blush, investors seem to like this report. But bear with me. I promise you I'll get you more information on that. In the meantime, let's expand the conversation. Now, Chris Heisey is the chief investment officer for Merrill Bank of America Private Bank. Malcolm Etheridge is executive vice president at CIC.

Well, it's great to have you both with us. Malcolm, to you first. Okay, it's a nice move today. It certainly feels better than what we've witnessed for the last eight weeks. We've had eight straight losing weeks on the Dow. Does this have any kind of staying power in your mind? Yeah, I heard you and Liz both use the word a couple, talking about the number of days we'd need to see back to back before we could start to feel just a little bit better. I'd actually need to see three, four,

five days, an entire trading week where the advanced pressure is significantly stronger than the decline pressure like today, where, you know. How many weeks have we had in the past? How many days have we had in the last couple of weeks, I'll just say, where we started out in the right direction, very strong at the open, and then by the time we got to 2 o'clock toward the close, all of a sudden the market just starts giving it all back. And so I'm not nearly as optimistic as some of the other folks I've listened to on the network today talk about where we are and does this mean better days are ahead.

Well, I think optimism is fairly tempered, though. I don't hear too many people. People at this point are happy with three, four, five hours, to your point. Chris Heisey, how about that idea? Wondering if we can string anything together. A week or so ago, we had a nice little move of 5% to 7% depending on what index you were looking at. And then they sold it down so hard. Yeah, Scott, I think this is the stage where technicals begin to converge with fundamentals.

And Liz said it really well before. You know, start to drip. Start to have those plans ready. Don't wait. And that's across different asset classes. But, yeah, I'd be happy with a few hours. I'd certainly be happy with a week of sustained somewhat bounce. But we're still in that workout phase. Right. Volatility, as Mike said before, is still a little too high. We need to get through this earnings announcements without a very cloudy picture.

It's somewhat cloudy, but we need to see some semblance of balance coming out of this earnings period because the next two tailwinds that we need to establish that secular bull market again and get out of the cyclical bear is a defined peak in inflation. Not every statistic, but at least a defined peak in inflation. And then ultimately this belief that earnings can hang in there for next year. We still need more data on that. Yeah, I mean, people are trying to make a call, Liz, that earnings are going to be fine. Others would say that the analysts are crazy if they think that earnings should be where they are now. Numbers really haven't come down by a whole lot, and it seems to be inevitable that they will.

Well, I mean, what's the definition of fine, right? The second quarter earnings are actually expected to be kind of uninspiring, right? Four or five percent growth. I think people would take that. The second half of the year. Absolutely. People would take that. The second half of the year, I think, is where some of the estimates need to come down.

And I think they're going to come down in the consumer space, particularly consumer discretionary. They may come down in industrial, some of the ones that are still high. But the second quarter earnings are not expected to be all that good. So I don't know that I would say they're outrageously overpriced right now. Everybody hold your thought for a second, because I promised you more color on this Zoom quarter, which has the stock popping in the OT. Frank Holland has that for me right now. Hey, Frank. Hey there, Scott. Here's a Zoom up right now, 16 percent. Revenue in line with estimates. EPS was a beat, 16 cents above estimates. Really solid Q2 guidance, slightly above estimates. Also,

full-year guidance above estimates. Key metric here for a stock like Zoom, we're talking about these work-from-home stocks, their growth, a lot of questions about whether they can sustain it. Net dollar expansion rate, that is the growth or decrease in revenue from existing customers, that improved by 123% quarter over quarter. Important to note, though, in Q4, that net dollar expansion rate was 129%. In the 12 quarters before that, that Zoom was a publicly traded company, it was above 130%. So some deceleration there, but in general, a very positive metric overall. And again, a beat on EPS, guidance above estimates for Q2 and the full year. Shares now up 17 percent. Back over to you. Wow, Frank, thank you very much. I almost had to clean my ears out, Malcolm. A beat and raise quarter. How often have

you heard that over the last couple of weeks? If nothing else, it's a welcome sign to hear from a very well-known company that has plummeted back down to earth. I mean, the stock is at 89. It's going to trade higher, obviously, 106 or so now. But this stock was so much higher than that. Not all that. It's 52-week high. It's 406. Yeah, it's especially great to hear in a name like Zoom that we all consider to be stay-at-home stocks, right. If you compare that against like your Netflix is your Peloton's, your Instacart's, things like that, that everybody considers to be those things that were only important during the pandemic. And suddenly they're no longer important as people are moving back around the world and doing their day to day activities. I do think Zoom is still a very important company. It's just tough for me as an investor to look here and say, you know, one good quarter they just put together and some very solid earnings is a case for me to buy that,

as opposed to some other companies in the tech landscape that I could pick up for similar pricing and know that they have a pretty strong upside as soon as the market turns versus God knows what happens in a Zoom. I understand that. I mean, I'm looking at the price to sales, right? It's six and a half now. I don't know what it used to be. And the PE is just about 20. It's just under 20. I don't know what it used to be, but I can guarantee you it was multiples higher than what both of those numbers now suggest. So it's interesting to follow. So Chris Heise, technology right here. Liz has said, you know, maybe mega caps are worth towing, putting your toe, what was the word you used?

Dripping. Dripping into. I mean, that's like barely your toe going into the water. But at least she's thinking constructively about something. What about you, Chris? Yeah, I think Liz is right. I mean, I think the knee jerk reaction here is for everybody to lump all of these long duration, you know, big story, little profit stocks into the technology sector and think that that's the whole technology sector and say that technology will not be the leader of the next business cycle. You know, that may be an aggregate, but certainly in terms of individual names

with strong balance sheets and great dividends and high cash and the fact that CapEx is going up, you know, we're still early in this innovation cycle. So dripping in technology, in energy still, even though energy could have a big air pocket in it, but it's a big free cash flow sector, small in the S&P, we all know that, but still under-owned, Financials overdone overall.

And if you just have this understanding that cyclical bear markets look like the world is going to end until there's a tailwind that comes and says, wait a minute, relax, let's reassess, let's look towards the future. And that secular bull market is still really well entrenched in our opinion. So we'd be having plans ready and over the summer to rebalance. OK, we're looking at the ARK Innovation Fund right here. That's the ARKK, which is getting a nice bounce, presumably off of the Zoom beat and raise. It's obviously in the wheelhouse of those kinds of stocks that Cathie Wood buys, those so-called high growth innovation names, where she's looking at a five year real time frame on when she thinks those stocks are going to are going to pay the dividends that

she's betting so highly on. Malcolm, I'm wondering, can you get excited about these names here? I mean, Eric Jackson was on with me last week and he was buying Twilio's of the world and some of those names that have just gotten destroyed. I mean, down 75 and 80 percent. And as we said at the top, picking the bottom is awfully difficult, if not impossible. So who cares if you miss another, I don't know, five percent or so to the downside if your time horizon is long enough? Doesn't really matter, does it? Well, it does matter. I think it was Bill Gurley who said just because it's down 80%

doesn't mean it's a good value, doesn't mean it's a good discount. It could be down 80% and that means it's got another 15, 16% to fall before it bottoms out, right? So personally, I'm looking right now at quality names that are in position to return cash to shareholders, right? So if I want to be in tech, which I do, I want to be looking at names like Microsoft, Google, and Apple, which, full disclosure, I did just purchase each of those names personally and across our book for clients. But I'm wanting to be in those names that actually lead the S&P and the NASDAQ index so that if this actually is the bottom and the capitulation that everybody's talking about and we're looking for, we know that those are the names that are going to lead us back into that secular bull market. And so I want to be in those names that

are going to be leading the charge, not necessarily the bottom half of the QQQs or even in the ARK Innovation Index, where it's literally just throwing darts at a dartboard with a lot of those names. No, but just in and of itself, the fact that you suggest now that you bought Apple for some clients and things like that, you're willing to go into names that have been really banged up. And I still have people who come on and say Apple could go to 125. But you don't care if you miss from 145 to 125 if your time horizon is as long as it apparently is. If you offer me an iPhone at a 25 percent discount, I'm going to buy that iPhone. That's the exact same way that I'm looking at Apple stock.

Yes, you could offer it to somebody else five dollars cheaper later on down the road. But I got mine 25 percent off. What do I care? So that's essentially the way that I'm looking at it. It's a very quality company. They've got very long term contracts with enterprise clients as well as the U.S. government. They are going to turn it around as soon as the market turns around. I'd rather be in names like that than the ones that are a lot more speculative. All right. We'll make that the last word. Malcolm's a savvy shopper. We know that for sure. We'll talk to you again soon. That's Malcolm Etheridge, Chris Heisey and, of course, Liz Young.

Thank you for being here. See everybody soon. Up next, J.P. Morgan shares are rallying today as the big bank held its investor day. We're going to break all of that down. Huge move in bank stocks today. We got the top bank analyst on the street, Mike Mayo, when we come back. bank stocks ripping higher today led by jp morgan following some positive comments by ceo jamie diamond at the company's long-awaited investor day are we turning a point for that sector let's ask the top ranked analyst in the space, Mike Mayo of Wells Fargo Securities, joins us now. And you literally ran down here right from the meeting. I appreciate you being here. I mean, you haven't had you haven't had a big smile about J.P. Morgan stock these days.

Has that changed now? Well, I'm really smiling about the banking industry. This is the most attended, most important bank investor day that's out there. J.P. Morgan is the largest bank. And you had investors. You had Wall Street. You had all of J.P. Morgan's executive management. But do you know who did not show up? The boogeyman. The boogeyman did not show up. The bank stocks are low in value because the boogeyman is going to steal growth and cause all sorts of credit losses and problems. And guess what? There was no evidence of the boogeyman causing a recession anytime soon.

Credit quality is excellent. Main Street banking is on a tear. And what's good for J.P. Morgan is even better for a lot of other banks. But J.P. Morgan was very bullish for the industry today. Diamond might have thought you were the boogeyman, right? You don't like the stock. You don't think of it nearly as positively as you do some of the others, which you said the last time you were here.

Well, right? I mean, don't you have a hold on that stock? What do you have on it? I have a hold-rated stock. We have a price target that's higher than where the stock is now. But we see even better upside for those banks with higher Main Street banking. But look at J.P. Morgan as a microcosm for the broader industry. Today, J.P. Morgan guided Main Street banking revenues up by one-fourth this year,

and here was the surprise, another one-fifth higher next year. So we're on track for the best Main Street banking growth in four decades. Now, that's a smaller percentage of J.P. Morgan than, say, Bank of America or some regional banks like Fifth Third or U.S. Bancorp or PNC or several others. So that's a positive for J.P. Morgan. The other surprise today, though, was it turns out that Wall Street banking is doing a little bit better than expected, too. JPMorgan guided their trading to be up 15 to 20 percent year over year. So that's good for the likes of Goldman Sachs. So JPMorgan, very upbeat.

They gave us what we wanted. They are spending more money than any time in their history. So JPMorgan goes from a trust me story to an execution story. But you wanted that? You want the expenses to continue to go up like that? That sounds counterintuitive to me with what you would be looking for. Well, you have the best Main Street banking growth. Banks benefit from higher interest rates. Some banks are letting that rate windfall fall to the bottom line,

and other banks, such as J.P. Morgan, are spending a lot of that windfall. And so I'd rather those banks that are allowing more of that money to fall to the bottom line. But to J.P. Morgan's credit, Jamie Dimon's credit, they listened. They're spending $10 billion extra over a two-year period. Shareholders deserved answers. They got answers. They got metrics. So now we can go back and evaluate how they perform over the next one, two, and three years. So it's better transparency, better accountability, more Jamie Dimon the way we know Jamie Dimon. I mean, am I going to wake up tomorrow morning

and see a note of yours that dropped that said you upgraded it now that you don't have it on a hold anymore? I mean, because you don't sound like the analyst who has a hold on J.P. Morgan. You just made a case for all the reasons I should buy it. Well, like I said. Didn't you? Scott, you want me back on your show, right? In terms of I'm not going to. What are you doing tomorrow around 425?

Exactly. No, but realistically, Main Street banking has been the theme. It's still the theme. It's even more the theme after today and J.P. Morgan's Investor Day. Loan growth is accelerating. Federal Reserve data came out Friday night. Loan growth is on a tear. The economy is coming back online. So why wouldn't you want to be with those banks that have more U.S. exposure, more Main Street banking, more traditional middle market lending.

I mean, we're back. This is the best in four decades. I was on your show a couple of times in the last few weeks, and I said the fundamentals are dislocated with the valuation. You said, never have I been so wrong on the stocks and so right on the fundamentals, I think is what you said. And I'm even more right on the fundamentals. And we'll see if the stocks follow.

Today they followed. They should follow. But eventually, when you see the earnings, as soon as the second quarter, by the way, and for the rest of the year, I do think the stocks will go higher. Something's out of whack. Either the stock market as a whole is too high and will come back down to the bank level, or more likely, banks are too low and should rise up to the stock market level. Well, I mean, are we in the process of the stock market being, in your words, too high

because there are concerns about a recession? And if those concerns continue to percolate, you can't tell me that bank stocks are going to continue to do well in an environment where we become even more worried about the economic outlook for this country. Absolutely. I mean, the playbook is if the economy slows or goes into a recession, sell cyclicals. Banks are considered cyclical. Sell the banks. I'm saying that playbook is last century's playbook. That's a global financial crisis playbook. That's not the playbook of today because banks' credit quality is so much more steady. Banks have more annuity-like

earning streams. So I get the sentiment's negative, but the banks are stronger than the sentiment. And the banks, the price-to-earnings ratios relative to the market as a whole is almost half. No, I know that. I mean, Jane Fraser in Davos was talking about that with Sarah today. She called the bank stocks undervalued. And I've got to go, but quickly your answer to that. You have 40% upside on Citi from here,

I think. Yeah, Bank of America, Citi Group, others. There's a lot of upside on these banks. J.P. Morgan was bullish for J.P. Morgan, but even more bullish for the industry as a whole. All right. You know where to find us when you move that J.P. Morgan, when and if. When and if it happens. Thank you for coming down here. That's Mike Mayhem. Thanks for having me. Our Twitter question of the day is about the banks and about J.P. Morgan. We want to know, will J.P. Morgan stock be more than $150 per share by the end of this year? You can head to at CNBC Overtime on Twitter, cast your vote.

We'll bring you those results at the end of the show. Kramer just named one big bank, potentially, quote, the most explosive stock in the S&P 500. To find out which name he says you should buy from here, sign up for the Investing Club newsletter. All the info you need is right there on your screen. There's the QR code as well. Look at Mike Mayo is thinking, inquiring minds really want. He's like, which one is he talking about?

Well, if you join the Investing Club, Mr. Mayo, you can find out, too. Up next, Schwab's market playbook, how that firm is approaching all of this market volatility and what they're forecasting for stocks for the rest of this year. Plus, the retail stock one money manager is betting big on despite a double digit drop this year. That name, other top picks for your portfolio is in our two minute drill. We're back right after this. Welcome back to Overtime. Time for a CNBC News update with Shepard Smith. Hi, Shep. Hi, Scott. From the news on CNBC, here's what's happening. A crisis in the Southern Baptist Convention. A new report lays out accusations that leaders covered up clergy sex abuse for decades

and stonewalled survivors in an effort to protect their own reputations. The investigation launched by an independent firm after delegates to last year's national meeting demanded a probe by outsiders. A Russian soldier sentenced to life in prison today in Ukraine for killing an innocent civilian. It's the first time a war crimes trial has happened since Russia's invasion began. The 21-year-old Russian admitted to shooting an unarmed man in the head in the early days of Russia's invasion. And the motel room in Indiana where fugitive Casey White and Vicki White spent their last days together on the run now has a long waiting list. At least 70 people on a list to stay in that Motel 41 in Evansville. It's apparently become a hotspot, that particular room for true crime fans.

The manhunt for the two fugitives ended a month after a police chase and crash when cops say Vicky White killed herself. Tonight, fallout from the president's words about Taiwan, a Tuesday primary preview, and financial life lessons from somebody who buys everything with crypto on the news. Tonight, 7 Eastern CNBC. Scott, back to you. I appreciate that, Shep. Thank you. That's Shepard Smith. Well, one day does not a rally make, obviously.

But is there reason to believe that stocks can put together a nice move higher? Let's ask Omar Aguilar. He is Schwab Asset Management CEO and CIO. It's nice to see you in person. Welcome to the Stock Exchange for what you said was the first time in a couple of years. So welcome back. Thank you. What's it like, first and foremost, being the CIO of any asset manager at the particular time we're having this conversation? It is nerve wracking. It's not easy. You know, a lot of that is going back to, you know, how many years I have been doing this or other CEOs have been doing this, realizing that business cycles exist. You know, probabilities of recession exist and there is high interest rates.

There is high inflation. There's a lot of things that actually do exist. So what does all of that experience tell you about not only where we are, but where we might be heading? Well, you know, we're going into a lot of transitions right now. When you put all this into context, think about this. We're going from no inflation to 40-year high inflation. We're going to very low to minimal, in some places of the world, negative interest rates to higher interest rates. We're going to no volatility to high volatility, high liquidity

to lower liquidity as the Fed unwinds the balance sheet. So we're seeing a significant amount of transitions that are happening at the same time when we still have COVID, when we still have a war in Ukraine. So all those things create a significant amount of anxiety. Now, what the market does is something unpredictable. The market doesn't like uncertainty. The market likes to just figure out what is going to happen in the future. And in many cases, the challenge right now is that there's no answers. So how is all of that affecting your decision making? What are you doing relative to, let's say, what you were doing six months ago? Well, the big part of the process is continue to emphasize, and we emphasize this to all our clients,

market timing is not the strategy. Trying to find when will that be the bottom or when you actually get back in or out of the market is something that we try to prevent at all costs. Thinking about the long-term effects of the investment strategy tends to be the right place to be. We tend to say time in the market is more opportune and better strategy than timing the market. Does that mean you're taking advantage of some of the dislocations we've seen in the market? Or do you see opportunity to buy? Are you simply trying to rebalance? Take me through that. Yes. So what happens in market dislocations, what we're seeing now, Scott, is, you know, there's a significant amount of uncertainty around, you know, strategies that go up.

For example, what we have seen this year, energy stocks have actually outperformed the rest of the markets. When you actually see a significant amount of valuation compression that we have seen in technology stocks and basically the winners that we saw during the COVID area. Well, those dislocations in many cases, what we emphasize is, well, this is the time for rebalancing your strategy. Tax loss harvesting. This is the best time for doing tax loss harvesting so that you can reposition your portfolio that is consistent to your long-term objectives without changing the overall profile of your risk profile. What finally is, what's the most attractive thing you've seen in the market recently?

That even if you haven't decided to buy it yet, it's high on the list that folks who come on the network suggest you should be making now. Well, we continue to emphasize high quality, robust balance sheets, paying dividends, stocks. They tend to do very well during this time period. Get paid a little bit to wait through some of the storm we've all been trying to get through. I appreciate your time. Thank you so much for being here. Thanks for having me.

Omar Aguilar again, the CEO and CIO of Schwab Asset Management. You can hear more from Omar and other industry heavyweights at CNBC's Financial Advisor Summit. You can join us virtually on Wednesday, June 15th. Register now at CNBCEvents.com slash FASummit. Still ahead, deja vu all over again. Mike Santoli is breaking down today's market action in his last word. But first, Christina Partsanovalos is tracking some big stock movers in overtime. As always, Christina. Yeah, and Scott, this time I have a theme and it's about company transitions. One company is leaving China because it's too costly. Another is potentially being acquired.

And lastly, how another one is benefiting from the transition to green technology. I'll have all of those stock names right after this break. We're tracking the biggest movers in overtime. Christina Parts and Nevelos is here with those. Hi, Christina. Hi. Shares of advanced auto parts slightly lower in the OT right now, and that's just because the company reported its results. Unfortunately, it was a miss on the top and bottom line, so earnings and revenue came in a little bit light. You can see that the stock is slowly, it's just one-tenth of a percent down. And switching gears, chemicals company Albemarle shares also climbing higher after announcing an increase to its full year 2022 guidance. You can see the stock up almost 3% right now, up more than 160% from last year.

This is the guidance, I have to say, the guidance up 160% due to the completion of additional lithium contracts. So Albemarle is one of the world's largest producers of lithium, which we know is a key raw material for electric cars and their batteries. So the CEO said their lithium and bromine business are benefiting from the transition to greener technology. And then shares of Airbnb continuing to move in the OT right now, trending a little bit higher. It was down before our own Deirdre Bosa broke this story this afternoon that Airbnb would be closing its domestic business in China after formally launching just in 2016. Sources tell Deirdre Bosa the segment was costly and complex to operate. Shares also down 51% year todate. And lastly, Uber moving slightly,

just as I checked before coming to camera. After news came out that both Uber and DoorDash will be canceling their gas assistance programs for delivery drivers. The programs were initially launched just this past spring, last year, or this past year, but will be rolled back. Even though we know it, gas prices are soaring. Scott? They certainly are. Christina, thank you so much. That's Christina Partsinovalos following the money for us there in overtime. Up next, more on today's big bank rally.

Is now the time to get into that sector? We debate it in today's halftime overtime. Back in two minutes. in today's halftime overtime the big bank bounce the sector surging today from those comments from jamie diamond we told you about earlier good enough to get joe taranova back in the stock too listen you've got a double bottom that exists now at 115 i'm okay stepping in and buy it. I think I bought it at 124.5 earlier this morning. I'm okay buying it there, knowing that management now sounds a little bit more confident. And I have a point of reference against that double bottom at 115. It goes below 115 on a closing basis. I'll be out. All right, so that's Joe Terranova. Now let's bring in MarketRebellion.com co-founder Pete Najarian on the phone.

Pete, it's great to have you with me. You don't own J.P. Morgan. You have other names. You've got Bank of America. You've got Capital One. You've got Goldman Sachs. You've got U.S. Bancorp. Why no JPM?

Well, I can still tell you, and I stick by my word, which is it's still too expensive, Scott. And I'm not talking about dollar-wise. I'm just talking about we oftentimes look at these banks, we look at the price to book. And even though J.P. Morgan, it was way overpriced when it was up over $160, $170. It hit $172 at the beginning of the year. But even at these levels presently, given what we know about the company, and you look at the book value, you're still looking at one-and-a-half times book. Why wouldn't I want to be in the cheaper stocks that actually, I think, have a better opportunity

to outperform? Now, I'm not talking about PE. I'm talking about price to book. So I look at Bank of America, for instance, which is about 1.2 times book. I look at Citi that's well beneath its tangible book. And I think that gives me better exposure if I want to be in those names. I've been in and out of Citi, and I'm actually considering what I want to do with City right now, and that's all based upon Warren Buffett, his $3 billion stake, the 13F filing that we had recently, and the fact that he has stepped away from Wells Fargo, he's stepped away from J.P. Morgan, and Goldman Sachs. I think that's one spot that I disagree with the Oracle.

I like Goldman Sachs. I like it a lot, as you know, and it's performed really nicely for me from the standpoint of, and we bought it at one time book and been selling calls against it since putting on that position right after earnings in April. And I continue to like that name. I still think, and if you listen to Jamie Dimon, he talked about trading, right? And well, who does a lot of trading Goldman Sachs so I like that name even more based upon where Jamie thinks some of the profits are going to come from I mean to put it into perspective correct me if I'm wrong

Goldman Sachs is like the only stock actual stock you you've bought the whole year you're exactly right and it's because it was so inexpensive at this level and I and I still like it it was right around 310 inexpensive at this level, and I still like it. It was right around $310, $312 at the time, and I continue to like it. Unless something changes between now and the next couple of earnings, this will be in my portfolio, I think, for a long time. I've owned Bank of America now, I think, for the better part of maybe 7, 8, 10 years, so it's been quite a while. I continue to hold on to that. I think Brian Moynihan's doing a fantastic job.

And it's so similar in a lot of ways to J.P. Morgan. I just don't see the premium. And I understand Jamie Dimon, you know, we all view him as the best. But I think that's too much of a premium to pay right now versus where I can get Bank of America and potentially Citi. Interesting. I mean, look, Jane Fraser was on today, as I referenced earlier, Pete, from Davos and said bank stocks are undervalued. I mean, she's trying to make the case that her

stock, despite all of the issues with the stock, is one to maybe buy here or like you stay in. Yeah, I would tell you this. I totally agree. I listened to the interviews with her and, you know, there was they have trailed their peers for many, many years and for all the right reasons. I think the exposure across the rest of the planet outside of North America has been, well, I should say outside of the United States, because they're trying to get themselves out of Mexico, trying to get out of Russia, trying to get out of all kinds of other areas, and concentrate more as a U.S.-type bank. And I think that's what we're looking for. It's not going to be easy.

It's a transformational process. It will not be a quick fix. But I do think that the direction she's taking tells me that maybe it's time to start being somebody who wants to be a little bit bigger positioned or positioned in city. Obviously, the Buffett looking at that the same way. So why not follow the man who we've seen many, many times in the financials do extremely well? Yeah, I hear you. All right, Pete, I appreciate it.

Thanks for the time today. That's Pete Najarian with me in overtime. And stick around, by the way, coming up top of the hour, the Fast Money crew is going to have much more on how to trade today's big bank bounce. Up next, our two-minute drill, how to put your money to work in this volatile market environment. See you in two minutes. A reminder about a special program tonight. It's a CNBC special report, Inflation and Your Stock, 6 p.m. Eastern, right here on CNBC. Now it's time for our two minute drill. Let's bring in Intrepid Capital CEO Mark Travis. Mark, it's good to see you again. Welcome. Thank you, Scott. Good to see you. You say you're looking to put money to work

on high volatility days, which you define as the VIX above 30. We haven't had that many of those, which is a little bit interesting about just where we are relative to where volatility is. Well, I think Ned Davis did a lot of research showing a lot of values created north of a 30 VIX. You know, I'm afraid that most fund investors, Scott, buy high and sell low, which is the opposite of what you really should do. But, you know, in Intrepid Capital, we're always looking for companies that, you know, make things that people need and use. In this environment, that would be oil and gas.

I think ESG has created an opportunity for individual investors to step away from Larry Fink and BlackRock and buy oil and gas companies. One that we like is Civitas. It's out in Colorado, formerly called Bonanza Creek. I think in this environment where there are no leases out there to speak of and nobody wants to lend to them, that they're now going to start paying higher and higher dividends. So this one has a nice attractive dividend. It's about a $5.7 billion market cap. They're going to pay extraordinary dividends, roughly 50% of their free cash flow. The stock coincidentally hit a new high year to date.

So I think that's an area that's obviously worked not only in this company but others. Other things that we like are shoes. Can't do without those. Sketchers. That family has done a great job, Michael and Robert Greenberg. There's two share classes, which is a little problematic for us, but it's the third largest brand after Nike and Adidas, growing internationally. Very defensible balance sheet with a lot of cash. And lastly, a name that worked

well last week in terms of reporting, TJ Maxx. Oh, yeah, TJX. Yeah, TJX. It sure did. It sure did relative to some of the other retailers. And you're undeterred by margins, inflation, and things like that, the consumer strength, just given what the narrative is today? Well, I think people trade down in this environment. I mean, I hate to say it, but I feel like it's deja vu in the 1970s in terms of kind of administrative policy, oil and gas, and inflation.

So I think people to trade down into that type of retailer will do fine, and they really do a nice job, as can be seen in that last earnings report. So, again, we're trying to, you know, pick through this and protect client capital. And, you know, we'll see where we go. The other place we've done well is short-duration fixed income in our income fund, UX. So, you know, between the dividends on the equity and the rise, the rising yields in short duration credit, I think we're going to do just fine. All right. We shall see. Mark, I appreciate your time very much. That's Mark Travis, Intrepid Capital, joining us there. Up day, we asked, will J.P. Morgan stock be over 150 by the end of this year? Fifty three percent say yes. In fact, it will. Maybe you have high hopes for the market as well.

Mike Santoli will find out if he does with his last word, which I see is deja vu. And then we tease this as deja vu all over again. I know you're a baseball guy and like Yogi Berra channeling a little of that, right? That witty redundancy is great. Although deja vu with a question mark, I think it's also significant because yes, it seems familiar.

We're up 4% off the lows. We went up 5% off the lows a week ago and immediately fizzled and rolled back over. It's rational to feel like you've seen it before. And it's rational to expect the same result. Last year, when all we got were 5% pullbacks, it was rational to buy every one of them until it failed. So I don't really argue with anybody who says, oh, it's a rally seller's market. That's what we do here. Are there reasons to think it could be slightly different right now? Maybe seasonally. You got through May expiration.

That usually is pretty good. We are a little more stretched to the downside than we were the prior bounce attempts that we saw. There might be some month-end rebalancing into equities. People are looking at that since bonds have actually outperformed over the last three months. But those are pretty thin reeds. I think really what you're looking for is something structural that says the tightening of financial conditions we've seen based on Fed guidance and based on what the markets have done is going to be enough. And I don't know that we can see clear to that. Market still has a lot to prove. I mean, it doesn't take much at this point to make people feel a little better,

get a couple of days together. Not asking for that much. No, it's not. And very well might. Maybe expectations are beaten down low enough. I think that the smart thing is forget about the all-time highs, right? You've got to be up for 23% to get back to the all-time highs. It's much more about is this a good long-term entry point or not? I appreciate it as always. That's Mike Santoli

with his last word. I'll see you right back here tomorrow. Fast Money begins right now.