Closing Bell - Closing Bell Overtime: Breakout or Breakdown? 4/4/22

Episode Date: April 4, 2022

The S&P 500 and Nasdaq Composite closed near session highs. Is the market on the edge of a breakout or breakdown? Brian Belski from BMO Capital Markets and Dan Greenhaus from Solus Alternative Asset Management discuss whether investor can trust this rally. Plus, is the worst over for tech? Top investor Glen Kacher from Light Street Capital outlines his top trades. And, the “Last Word” from Michael Santoli – Is it safe for investors to relax?

And welcome to Overtime. I'm Scott Wapney. You just heard the bells. We are just getting started. In just a few minutes, I'll speak exclusively to Light Street's Glenn Kacher and get his best ideas right now. Looking very much forward to that interview. We begin, though, with our talk of the tape, the resiliency of this market. On display yet again today is the Dow erases a big hole in the Nasdaq surges. Even so, some say stocks are still on the edge of another major pullback. Let's welcome in BMO's Brian Belsky, whose year-end target for stocks is among the most aggressive on Wall Street, and Solus Capital's Dan Greenhouse. It's good to have you both with us. To you first, I mean, I can make a case on either way. Either

we're on the edge of something, either up or down. You look at the transports today, negative. Defensive posture has been sort of the word of the day. However, we fought our way back. Look at the NASDAQ surging today. Tech is strong. It's a resilient market. Which way are we going? Yeah, I mean, listen, in the short run here, I think the trucking stocks,

which I think you guys talked about this afternoon, are of particular importance. I think there's a big debate right now about to what degree you saw a couple of stocks like Knight Swift and a couple of others basically tank. My point is there's a debate, I guess, to what degree that is for idiosyncratic factors and to what degree that is sort of a harbinger of broader recessionary fears. What are you feeling today? If you look at this market, you're like, OK, the Dow, the Dow's down, down a couple hundred points. It's fighting its way back. It closes where it does.

Technology is very strong again. You can erase a lot of negatives real quick. Yeah. Listen, I think the market has been terrifically resilient. I think everybody's been talking about that for the better part of two weeks right now. I don't have any particular insight into why that is, other than to say in the short run, the economy is still particularly strong. And everyone seems to be talking nonstop, obviously, about the yield curve and the prospects of a recession. But that's something,

as we've talked about, that's not going to happen for 12, 18, 24, perhaps even longer. In the short run, you're still dealt with a strong consumer, a relatively strong, albeit decelerating economy, and therefore, in theory, higher stock prices. You know who hopes we don't have a breakdown is the man I'm looking at right now, right in that camera, Brian Belsky, the man, as I said, who has, I think, the most aggressive target on Wall Street right now for the S&P 500 for the end of this year, 5,300. How are you feeling about that right now? I'm feeling great, Scott. We have almost nine months to go and it's also great to be on with my good friend, Dan Greenhouse.

I mean, listen, we're still investors and we still have the best market in the world here in the United States. And I think the resilient word cannot be overused. And as we've been advocating now for several months, you have to be a stock picker and you don't be, you should not be, I'm sorry, make decisions on the index level. But really focus on the stock market as a market of stocks and own both growth and value. And I think that we're going to have this back and forth growth or value type of market for much of this year. But I think the thing that everybody's missing is I still think foreign money is coming back to the U.S.

And I think that's part of why you've seen this very strong market. And I think it's going to continue, and I think people are going to be surprised the second half of the year. One of the things that you and I have been talking about offline and online is that earnings numbers are going up, and nobody believes it. I sent you a chart over the weekend where if you take a look at fourth-quarter earnings since the beginning of this year, they're up 4 percent, and nobody's talking about this. We're all so incensed that the recession is coming, and 4%. And nobody's talking about this. We're also in sense that the recession is coming. And I just think that's wrong, Scott. Well, because the fourth quarter numbers don't matter. We're thinking about what lies ahead, Brian, and earnings growth is coming down. It's undeniable. Yeah, but Scott, you're living in the now, right? You're living in

the now. We already know that the stock, the earnings account, the market's going to discount what's coming. And I think that's why the second half of the year is going to surprise most people. You always want to, I mean, to use a skating analogy, hockey analogy, you want to skate to where the puck is going. But I think where the puck is going is that earnings are going to be better the second half of the year. And I don't think anyone's positioned that accordingly. And that's why you're seeing these back and forth, big gyrations and growth versus value. And that's why the growth trade was working in March in particular. I don't know. Jamie Dimon says that the puck's going into like water. It's going to disappear like the ice is melting on this whole thing. He says the stronger the recovery, the higher the

rates that follow. I believe this could be significantly higher than the markets expect and the stronger the quantitative tightening. I mean, why is he wrong? I don't think he's wrong. But I think the point that Brian and I are making is that the sort of melting ice cube or ice, whatever analogy you just used, the question is, for us as investors, is that happening over the next three, six, or 12 months, let's say? And I think the answer is no. So it's not quite earnings season yet. I don't disagree with anything Brian had to say. But there have been a couple of companies in the last couple of weeks that have reported. I made a quick list coming on.

KB Home reported. Ugly. Fine. But they had tremendous, leave aside how investors viewed what could be, what they said was they're passing through all the price increases, tremendous demand for housing. Darden Restaurants reported. Yeah, there were some worries about Omicron, but post that, plenty of demand and fewer restaurants. PBH, what used to be Phillips

and Van Heusen, they own Tommy Hilfiger and a couple of other things. Passing through raw material prices increases, no issue. And then finally, General Mills, the stock's basically back to a record high, basically saying the same thing. Okay, well, Staples have done very well. And on that note, Brian, what am I supposed to do with this outperformance of utilities and real estate in Staples and healthcare? What's the message in that? And by the way, I can look at what technology did today, and I know it looks great, but I can make a negative case there too. If you really wanted me to just to play devil's advocate, I could say it's too top heavy. Those are defensive stocks, just like the ones I named.

They just don't feel or sound defensive. I think the big tech stocks and the big communications services stocks are today's consumer staples names. If you take a look at consumer staples, utilities especially, they're very expensive, Scott. Outside of a stock that is a grand leader, top 25 company in the world like Costco, I think it could do very well. Walmart can do very well in this type of scenario. If you take a look at healthcare, it's the cheapest sector in the market. We use multi-factor models and we take a look at price sales, price earnings, cash flow, dividend yield. It's cheap, but at the end of the day, it's not a value trap, but it is more value trap-ish because the earnings growth is not as strong as the market

you have to be excessively uh selective there i think there's way too much capacity in some of the orthopedics you have to really dig in in the weeds in terms of biotechs and big cap pharma with respect to pipelines and so that has become probably the most stock picking oriented from a sector basis that i've seen in 15 years. So you really have to do the bottoms up work in health care. So from a from a from a sectoral basis, again, I think utilities and staples are very expensive. And that's the area that you probably should be trimming now. I want you to respond to Jamie Dimon as well, because I keep hearing you bring it up and it sounds it sounds worrisome.

And I keep hearing. Yeah, but yeah, but things are good. The earnings are growing, like you said. Oh, a recession, even if it happens, isn't for 12, 18 or 24 months. Like Greenhouse just said, sitting here on this desk. What's your response to what Jamie Dimon has to say? This doesn't paint the prettiest picture. It doesn't. But again, remember, he's trying to kind of under-promise and over-deliver. You heard Mike Mayo before your show started talking about deposits. But I think we've kind of forgotten about the deposit business in the big banks. And I think that's why I've gone back and forth on why we like the money center banks

because of the multidivisional assets. So I'm not surprised that he's talking things down. I think he's trying to get in the Fed's ear a little bit, not to be actually on the other side, not to be as aggressive as everybody thinks. So, no, I'm not surprised he's saying that at all. But getting back to what Jamie Dimon had to say, I do think it's important. We talk a lot about this, but it's important to frame the context in which this is happening. That is to say, the Fed is going to hike interest rates by, let's call it at least 200 basis points this year.

In the last 30 or 40 years, you've only had annual years, calendar years, with 200 or more basis points, like twice. I think it was 04 and 94. That's almost never happened. And more importantly, going back, call it 40, 50 years, this is the most important point. The Fed has never not caused a recession when you've had the unemployment rate under 4% and inflation over 6%. The Fed has never engineered a soft landing in the environment in which we find ourselves. You started this conversation by saying that what do I agree with, what Brian and I agree upon. I mean, now you sound like you agree with Diamond and you don't think that Belsky's view is 5,300 on the S&P 500 for this year. Does that sound reasonable to you?

The next nine months? He's not even sitting here, so you can say whatever you want. Brian knows where to reach me. But listen, do I think the market's going to be in the year 5,300? That might be a little high for me. But do I think the market, the biases for equities and credit to be higher or to appreciate over the course of this year? Yes. The question for our investors and our fund is, am I supposed to advocate, oh, we need to liquidate everything we possibly can because perhaps 12 or 24 months from now, there's going to be a recession. That's not tenable. What we've discussed in the past and what I believe, and I would be interested

in Brian's opinion on it, is how do I view my portfolio over the course of the next 12 months? There's just been a starting gun, so to speak, that says, hey, the yield curve inverted, granted for a minute and barely, but there might be a recession over the next 24 months. Perhaps my higher beta, my illiquid positions, or anything that I'm less comfortable with, whatever, however you want to define that, I'm supposed to begin thinking about that rotation. It doesn't mean right now Jamie Dimon saying the sky is going to fall when they hike by 50 basis points four times over the next four months. Now I have to be completely in cash. I disagree with that. I think this is obviously a process rather than an event. Sure. And timing anything is virtually impossible. But how do you deal with that

perspective, Brian? Well, if you go back to the 1970s, the average time is anywhere between 11 and 23 months. The average over that time is 17 months when the yield curve inverts. I think too many people are talking about the 1970s, so let's talk about it to give you some facts. Between the time the yield curve inverted in 1978 to when we saw the recession, the stock market was up 9%. And if you would have sold everything back then, you would have missed out on that 9%. That being said, I still think what we should be doing is everybody talks about it, but nobody really defines it. Be a quality investor with respect to both growth and value.

Look at the operating performance and cash flow, balance sheet strength, if they pay a dividend, even better. And I think you can be very well balanced in both growth and value and not be overly in terms of a high tracking year in terms of sectors. And I do agree that the more illiquid, the more, I think, risk. But I go back to consumer staples and utilities and do the same work that you did on technology. Technology was expensive, and the market did a really great job in terms of being discriminating and selling those high multiple areas. I think the same thing is going to happen in staples and utilities. And that's did a really great job in terms of being discriminating and selling those high multiple areas. I think the same thing is going to happen in staples and utilities. And that's where I think too many people are overloaded. But I'll tell you what, Brian, I mean, there are some people like

Dan Niles who think that technology is going to go right back to where it was in terms of lower, that this is a fool's rally. It's a bear market rally in every single respect. And it's going to be sold in some of the stocks that have had nice bounces off the lows are going to revisit the ugliness and in the not too distant future. Why is that view so outlandish? Well, I think I don't think it's outlandish when you think about the way that Dan invests. Dan's primarily a very high growth investor. He's saying the opposite that Kathy Wood is is saying and that's okay every you need the market but i think you need to be a diversified technology um owner and actually not be overweight we're not overweight tech we're overweight tech for the next three to five years but we're not overweight tech for the next 12 to 18 months because i still think it's a really big

part of the of the market you can't be markedly overweight tech unless you have a very very big position like let's say 40 we're not that. We're just advocating the high-quality, cash-rich, consistent earnings tech, and we do not think that they're expensive. All right. Let's add to this market mashup. Let's bring in Brenda Vangelo of Sandhill Global Advisors, of course, of the Halftime Investment Committee. Greg Branch with us of Veritas Financial Group. It's good to see the both of you. Greg, you used the word with our producers today, a reckoning,'s good to see the both of you. Greg, you used the word with our producers today, a reckoning, that we've got a reckoning coming. In what sense? I did. And I largely agree with Dan on this, that the Fed has never engineered a soft landing with

even just some of the factors that we're seeing right now. And so I would add to the factors that he intimated that in four of the five last recessions, we saw a doubling energy prices contribute greatly to that outcome. And that's what we've had here. I'd add that in those past recessions, we haven't seen supply chains impacted to the degree that we see them now that have led to the persistently high inflation. I would add that we did have a global conflict threatening to push energy prices higher for longer, as well as continue to impair those global supply chains. And so in far less circumstances, in far less precarious circumstances, the Fed hasn't been able to engineer a soft landing. And I don't think that they'll do that here either. Now, I'm not necessarily saying that we'll have a recession in 2022.

But what I am saying, Scott, is what you alluded to earlier, that corporate earnings growth is, without a doubt, decelerating, probably into the mid to low single digits. And none of the big banks are there yet, although many of them are coming down and coming down. They were over 5,000. They're coming down to the 49, 48, 4700 range. But I think it's far more likely that we see a sub 4,000 on the S&P 500 than we see an above 5,000 just from the sheer number of bottom line challenges that companies will continue to face throughout the year. We've talked about inflation rising faster than wages, both of which is a problem for corporate America. We talked about the increasing interest rate environment,

which makes debt obviously a lot more expensive. So I just see lots of challenges that we have to answer. I think today's a perfect example. I'm looking at it like a football game. You've got the defense, the NASDAQ, look great the whole game. Offense getting banged, pushed around a little bit, finally found something towards the end of the game, put something together and won the game. Offense getting banged, pushed around a little bit, finally found something towards the end of the game, put something together and won the game. But it doesn't hide the deficiencies that the offense is facing right now. And you could say, well, the running back's not doing

that well. It's all done on the receivers because technology is doing well as part of that and some of the other stocks. But the transports, Brenda, as I mentioned, and some of those defensive sectors are the ones that continue to stand out, albeit not so much today. What does it all mean? Yeah, I think when we look at the transports in particular, I think some parts of the economy, like goods-related industries, you could say we have seen peak there. If we look at where all the consumer dollars went over the last couple of years. You know what, we're going to have to work on Brenda's microphone.

I apologize. Greg, why don't you take that too? I mean, you could look at today and say, wow, it's a really resilient market, and that's super impressive. But there are some deficiencies under the surface. Yeah, look, I am a little bit worried about the casino, probably more so than Brian. We are transitioning from a period where consumer demand was largely supported by physical stimulus we'll be we'll be uh lapping that on the one hand while we are seeing strong wage growth and we'll continue to see that by the way the jolt's data showed 11 11.2 million openings we have about 900 000 people looking for jobs as long as the

it's as long as the competition for workers remain in touch, we'll continue to see wage inflation. But it was only 5.6 percent. Agreed, it was bigger than the 5.2 percent from last month, but a far cry from a 7.9 CPI. So what you're seeing with the consumer is that the basket of goods that they have to buy is eclipsing their available spend. And I think that that will continue to play out through the year. So I do think we'll see some top line challenges. But at the end of the day, it's that bottom line challenge for the companies that concerns me the most. And I think we will continue to see a sharp deceleration into what is likely a recession. We have all of the ingredients

for it. If we have all the ingredients for a snowstorm and you think it's not going to snow, you have to tell me why. And we have all of the ingredients for a recession. You couldn't write the playbook any better than the factors we have right now. I don't know. I mean, sometimes, with all due respect, the weathercaster blows the forecast. I mean, sometimes it doesn't come out like the models suggest. And we're looking at a model, right? That's what this whole thing is about. Sometimes it doesn't come to fruition the way you think. Brian Belsky, what do you make of Cathie Wood? You mentioned her earlier. You know, obviously the ARK funds remain in focus

and those stocks have gotten off the mat too and they've recovered quite nicely. She basically tweeted that the Fed's making a big mistake. Yeah, I don't think the Fed's making a big mistake, but I think obviously her's making a big mistake. But I think obviously, her approach is obviously momentum driven. We already know that Kathy was a prior longtime client of mine through the years. And she is what she is in terms of picking those stocks. But I think we're all being way too negative on the Fed. Doesn't matter if it's this person or that person. I think we've

been disrespectful to the Fed. I really do. And we didn't see these same people be chastising the Fed. Doesn't matter if it's this person or that person. I think we've been disrespectful to the Fed. I really do. And we didn't see these same people be chastising the Fed back in March of 2020. So again, we know that the Fed has a hard time orchestrating a soft landing. But we are dealing with variables that we've never dealt with before. I think it's dangerous to say it's different this time, but I think there's a very good chance that the supply chain issue could come off just as fast as it increased in terms of the problems. And I think with respect to Kathy, obviously she's doing what she does

in terms of looking out longer term. But I think where she is absolutely right, Scott, is that when growth is scarce, growth outperforms. And I think that's where she's kind of going with this. And I think that's what ultimately you've seen, why you've seen this momentum back into tech on a short-term basis. We're going to leave it there. Greg, thank you. Brian, thank you. Dan, thank you as well. We'll talk to all of you again soon. I know we will. Our apologies to Brenda. We'll have her back as well. Up next, the Twitter takeoff. Elon Musk taking a big stake in the

social media company. So what's at stake for the stock? We'll discuss that, plus the big tech buy list. Light Street Capital's Glenn Kacher giving us his best ideas. Overtime's back in two minutes. Story of the day, for sure. Individual stock standpoint. That's Twitter. Shares surging on news. Elon Musk has taken a more than 9% stake in that company, becoming its largest individual shareholder.

So what might Mr. Musk be up to? Let's ask Alex Kantrowicz. He is big technology founder and a CNBC contributor. What do you think the answer to that question is? Well, look, I think that Elon Musk knows what he's doing here. He's helped pump cryptocurrencies. He likes to cause a ruckus and he's causing a ruckus with Twitter. And he might see Twitter as the ultimate meme stock here. You know, we see what happened with GameStop, AMC. And Twitter is a place where memes are made. And Elon Musk is super active there. He probably knew he could jump in, cause chaos, maybe get some of his perspective into the heads of management there. And hasn't it worked out quite well? He added 750 million dollars to his net worth today. And this is probably not the last we're going to see

of it. All right. Well, then on that note, right, how active, so to speak, do you think he's going to be? Right now, it's a passive stake. Might he become, though, more active? May he look for board seats or something even more than that? i would be shocked if elon doesn't become more active here only because you look at the way that he runs his companies he has spacex it's all about getting the space and making us some inter a multi-planetary species he has tesla which is all about you know helping the world but bringing electric cars in and he sees twitter as the de facto town square right and that's another important part of the world is the way he puts his business investment in terms of his time and his money is all about changing the world in a way that he thinks is for the better. And Twitter fits squarely into what Elon is interested in. So do I think that he's going to sit there and be a passive investor?

No, I think the fact that even filed on that form is a bit of a joke. And we're going to see him be extremely active. All right. So if you're sitting inside Twitter today in one of the executive suites of the rank and follow, whatever, what do you think you're thinking today? Let me tell you this. I watched Twitter very closely today and I haven't seen a single Twitter employee, not one Twitter employee celebrate their new investor. You would think that someone comes in and puts nine, you know, buys 9% of your company and that, you know, a couple billion dollars in spikes the stock up 25, 27%. You would be celebrating. Haven't seen any of that today. And that tells me everything I need to know. I think Twitter employees by and large are very wary about Elon's involvement. They've seen him trying to become like a de facto product manager of Twitter as he

tweets his way through the way that they should handle their product and their content moderation. And I don't think they like it at all. And I think there's reasons to be concerned, especially when it comes to advertising. I saw this one suggestion today from a respectful person with a respected point of view who suggested that they wouldn't even be surprised if somehow Twitter ended up as a private company through all of this, that Musk would team up with private equity and do that. Do you see that? Look, I wouldn't say anything is impossible with Elon Musk. We've seen what he's done and he likes having people tell him that stuff is impossible. And then he goes ahead and does it. However, I believe that Twitter should be a public company. I think it should be accountable to shareholders. I think it's one of

the few prominent tech companies, the few tech companies that are managing speech that doesn't have founder control at the moment and has a more, you know, equal distribution among shareholders. It's an important public good. And I think to take it private, to put it all in one person's hands, to me would be a devastating move. It would harm, you know, Elon says he wants to, you know, increase free speech here. I think it would harm free speech because it would be about the speech that Elon wants, no matter what values he's trying to, you know, implant in the company. And so, no, I believe that it should be public. And, yeah, it would be a shame if it went private. Interesting. That's an important point you make, too, about the single class of shares rather than some of the other companies that we've seen. Alex, I appreciate your time so much. Enjoy

the conversation. Take care. We'll see you again soon. Let's get to our Twitter. Speaking of question of the day, we want to know what do you think is the best Musk trade right now? Is it Twitter? Is it Tesla? Is it something else? You can head to at CNBC overtime and cast your vote. We'll bring you the results at the end of the show. Up next, we're drilling down

on the tech trade with Light Street Capital's Glenn Kacher. Where does he see opportunity in that sector today? He joins us exclusively next. Welcome back to Overtime. Time for a CNBC News Update with Shepard Smith. Hey, Shep. Hi, Scott.

From the news on CNBC, here's what's happening now. The National Security Advisor Jake Sullivan said this afternoon Russia is committing war crimes in Ukraine and that the carnage in the town of Buka this weekend is more proof. The Ukrainian president, Volodymyr Zelensky, in Buka, called it genocide. Since the bedroom community was retaken by Ukrainian forces, officials say more than 400 civilians have been found dead there and in surrounding towns. An arrest announced after the weekend mass shooting in Sacramento. Six people killed, all identified now, 12 others injured. Cops continue to search for suspects

after more than 100 shots were fired. And the Senate Judiciary Committee expected to vote shortly to send Judge Katonji Brown Jackson's Supreme Court nomination to the full Senate. That nomination expected to advance on an even party line vote. Tonight, new data shows the fentanyl crisis in America is exploding. We'll talk to the director of the National Institute on Drug Abuse about what's being done to stop it on the news right after Jim Cramer, 7 Eastern CNBC. Scott, back to you. Appreciate it, Shep. Thank you. We'll see you then. Another strong day for tech stocks, as you know, which have surged off the March bottom. Is it sustainable? That's the

big question. And where is there still opportunity in that space? Let's ask StarTech investor Glenn Kacher of Light Street Capital. Welcome to our new program. It's good to see you. Thanks for having me on, Scott. Appreciate it. Yeah, I was looking at some of these software names today. Obviously, a nice move today. And it's been a really nice bounce from the bottom. Do you think the worst is over? We do. We've seen software multiples come down 50 percent to pre-COVID levels. We can buy blue chip software companies growing at 25 percent a year at six to seven times recurring revenues. They're generating mid-20s EBITDA margins.

These are the most durable companies in the tech industry. Once their customers start using their product, it's very hard for them to stop, and they typically grow processes on top as well as plug even more software solutions into those underlying software products. So we see a real opportunity here that only comes along every few years. How do we know that multiples have compressed enough if we think that interest rates are going to rise more? Well, it's impossible to know exactly, you know, where the bottom is, you know, with

any precision. But, you know, when we look back at other periods where the yield curve flirted with inverting and where the Fed was raising interest rates, a lot of the damage tends to come up front. We also look at it, and when we're talking to software companies or customers of those companies, they really see buying more software as a way of fighting inflationary pressures. If you really think about it, enterprise software creates processes and allows for the reduction of labor and lower cost business processing. So, you know, we really see that our companies and software companies selling the antidote to inflation, which helps their demand. Let's go through some of the names that you like. Zendesk is one of your faves. It's a Z-E-N for those who are playing wherever you are.

Why so? Yeah, so they're seeing real improvement in their business. They've rolled out a sweet product and they've also been attacking larger and larger enterprises with their solutions. And that's really reaccelerated corporate growth into the mid 30s. activists and failed M&A. The company was trying to buy momentum, as you probably know, Scott, and investors came out and said, you know, that's not really what we want. We don't want to see a larger expense base here. We'd like you to continue to manage up those operating margins as we've seen this really strong growth in the core. And now we're at a point where private equity has made a bid for the company. Hellman and Freeman made an unsolicited bid without really doing any upfront work and getting in to look at the company's books at $127 to $132 per share as sort of an opening salvo. Toma Bravo has been silent. And we see the strategic value of this company at $180 to $200, most likely, if there were to be a strategic bidder. We think there are at least seven significant strategic bidders that could try to take the

company out. And the third option is that management just continues to run the business really well, but manages the expense structure down. And we think the stock could be a double or triple there going that route over a couple of years. One of your largest positions is in GoodRx. Why so? Why do you like that one? Well, you know, we've been through a period during COVID where consumers were going, you know, to the doctor at lower rates because doctors were shut down and consumers were trying to stay away from places where perhaps there was a higher chance of getting COVID. And during that COVID period, we actually saw diagnoses of serious and chronic conditions decline. And that's not because these diseases were less common.

It's just because people weren't going to the doctors much. This company has been growing its revenue in the mid-30s despite this slowdown in doctor visits. And at the end of the day, they really help consumers save money and make pharmaceuticals more affordable. What could be better than that for the consumers out there? And they just reset guidance a little bit very conservatively because, again, in Q4 when Omicron spiked up, it reversed some of the positive trends that had been occurring last year. So we've seen them kind of pull back, set a low bar, and we expect 2022 to be a fantastic period for the company. Yeah, I mean, because the stock's been cut more than in half, right, from its 52-week high. I'm looking at it on my fact set right here.

48 is the 52-week. It's obviously $20 now. Three months, it's down 35%. So, I mean, you see enough upside to get back towards that high level that I just mentioned? Absolutely. We see this stock being a double or triple in two and a half years. Interesting. Other plays that you like. I'm curious your take on EV stocks. I mean, because they were sort of in the epicenter of the, you know, getting ahead of yourself, growthy names with big

multiples. Now, obviously, a lot of them have have come back down to earth. But how are you playing that space right now? Yeah, we're playing it in a very selective way. I mean, we see Tesla absolutely just, you know, executing at the top of its game, scaling manufacturing globally in China as well as Europe, despite shortages in the semiconductor area as well as in the battery area. But the company has done really a fantastic job of managing its supplier base over the last several years, and that's enabled them to grow market share and really take over share from traditional car makers, both in the EV category and in the taking share from internal combustion cars.

We also like a company called Li Auto in China, which is a very focused company, just sells one model now and is getting closer to selling a second model of an SUV. It's a hybrid solution, which makes it a very good solution in the Chinese market, given that there is less exposure to or less opportunity for charging stations. So it really can be a single car for a family and allow them to travel both on traditional gasoline as well as EV. You know, we used to speak a lot about, speaking of China, about China technology stocks. And if I recall, the last time you were on with me was maybe a handful of months ago. I feel like you told me, at least in your eyes, that the story had changed a bit. It's obviously become a much more volatile space and maybe with that more difficult. Where are you today? Because, you know, those stocks, for example, today had a big day,

but tomorrow could get creamed. How do you play it, if at all, right now? Well, it's been a very tricky sector. We're seeing macro news in China be it's getting a little bit better as COVID's calmed down, but it's still a challenging backdrop, growth backdrop. And at the same time, there's been a lot of new regulation in the internet sector and technology sectors. We think at this point that a lot of that fear has maybe been overblown and the government, frankly, has come out and cleared up some of their intentions about how the risks of perhaps a delisting and some of the auditing measures that the U.S. would like to get access to their companies to enable our markets to continue to trade those securities. So I think that there's been a little bit of a de-risking there. We like some of the base e-commerce companies, Alibaba, JD, Meituan,

as ways to play an economy that we think will be recovering in 22 and 23. Before I let you go, obviously one of the stories of the day, as I mentioned, and obviously out there, Silicon Valley, where you are, Elon Musk and Twitter, you own Twitter. Does this make you want to own Twitter? We don't own Twitter. As you know, it's primarily a news business at this point. News businesses can be tough to monetize. I think the company has a long track record of running a really high quality and unique site, but finding it difficult to monetize that site and to really grow in a sustained basis their users and traffic. So while it's an important, let's say, public good maybe, and I think Elon,

you know, as many billionaires and public figures see a lot of value in Twitter to their businesses and to their ability to speak out, speak directly to their customers and their fans, so to speak. I'm not so sure that it's a great investment for us. Oh, OK. All right, we'll make that the last word. It's good to see you. Glenn Kacher, Light Street Capital. Talk to you again soon. Thank you very much, Scott.

All right, take care. Much more on Musk's stake in Twitter ahead. Halftime Committee member Pete Najarian joins us next on where he stands on the stock and why, and later a top media play for your portfolio. That's in our two-minute drill. Overtime is back after this. Pete Najarian joins us next on where he stands on the stock and why. And later, a top media play for your portfolio. That's in our two-minute drill. Overtime is back after this. In today's halftime overtime, Josh Brown's hot take on Twitter during that stock's second best day ever

and what he says could be in store for the company after Elon Musk takes his stake. It's one of the worst technology investments I've ever been involved with. I didn't lose money, but it was dead money during a period of time where the Nasdaq quadrupled. I could have literally thrown a dart at almost any other stock and made money. I don't see myself getting back in, even though I wouldn't be shocked if another 13F were filed and somebody else with deep pockets came in and said, wait a minute, he's not taking that thing.

I want to take this thing. Well, it wasn't dead money for our next guest, MarketRebellion.com co-founder Pete Najarian, who bought Twitter calls on March the 25th and sold those calls today for a nice profit. Right, Pete? Well, it was great last week, Scott. I mean, we talk about this all the time. Unusual option activity. We were talking about it last Monday and some huge buying in there. Thirteen thousand of those May 44 calls buck and a quarter.

Today they open up around seven bucks. You don't ever want to overstate your welcome. Yes, they went up higher. They actually went all the way up to 940 on the day, then pulled back a little bit. But amazing how fast things can move, especially when Elon Musk is involved. And his voice does speak a lot louder than a lot of others, especially with the fact that he's got 80 million Twitter followers, Scott. So really interesting news that broke out today, obviously. And it's amazing. I mean, when you look at the volumes today, for instance, 264 million shares traded versus 19 million normal.

1.6 million option contracts traded. It was the number one trading option out there today. So that was interesting. 71% of that was coming on the call today. So that was interesting. Seventy one percent of that was coming on the call side. So a lot of activity was going throughout the trading session. Even in the after hours, we're seeing more and more volumes collect as far as the shares are concerned. But an amazing day for Twitter. There's no doubt. Before I let you go, I'm told you're buying Facebook calls today. Is that in part because of this?

Well, in part, but I would also say this. I'm considering more. Yes, I bought some Facebook calls. They were buying very short term calls again that expire on Friday. I like this name. And I'll tell you what, the comparisons I think between Facebook and Twitter are very interesting because of the fact that when you look at these, you go back to like 2014, Scott, and it's a great example of what you've got to have your eye on the ball. And that's one thing that you've got to give to Facebook, Metaverse, whatever you want to call it, and what they have done. They have kept their eye on the ball the entire time. Twitter, on the other hand, they were only focused on eyeballs. They weren't focused on profit. When you look at where the stock was from the time of the IPO until it was last Friday, you had gained nothing.

Meanwhile, you look over at Facebook and you see something that's just an unbelievable trajectory to the upside. So when you look at these two companies, one has incredible free cash flow, the other not so much. One has incredible growth, the other not so much. One is all about profits being Facebook, Twitter, not so much. And I think that's the problem. And I see Elon is probably looking at that and saying, you know what? This can change. And maybe he's the guy who can do the changing. I wish I had more time, but not so much.

Pete, we'll see you soon. All right. That's Pete and Jerry. Up next is Santoli's last word. Plus, cashing in on sky-high gas prices. The stock won money managers betting on now. That's in our two-minute drill. And as we head to break, a message from CNBC contributor Nelson Ranieri as CNBC celebrates Financial Literacy Month. I arrived along with my family when I was three and a half years old from Cuba,

and we didn't have anything but $50 and a lot of dreams. But what we learned was that we live in a country that for those who are willing to learn how the financial system works, educate themselves and work hard, there are pathways to increasing personal wealth. It's been an exciting journey, and I encourage all Americans to take advantage of a lot of the free resources to educate themselves more on personal finance. Welcome back. We have an OT alert to tell you about GoodRx, the shares that we just spoke about with Glenn Kacher of Light Street. Look at that, up 3%. That's after he told us that he thinks that stock could double or even triple in the next two and a half years. We also have another big mover in overtime, cruise line operator Carnival,

Seema Modi, telling us those details, which is why the stock is on the move. Seema. Hey, Scott, recession fears do not seem to be derailing the travel rebound. Carnival Cruise Line just disclosed that last week was its busiest week of bookings in the company's history, with a double a double digit increase from the previous record. And as bookings improve, it's continuing to add back more ships with 22 of its 23 vessels back at sea. The 23rd set to sail this May. You'll see shares are higher on this encouraging update, but still a ways to go down about 35 percent from its 52 week high. Scott. All right. Thanks. That's a nice move in the O.T. Up next is

Santoli's last word. Why it might be time to relax over time. We'll be right back. All right. Let's get to Mike Santoli for Santoli's last word today. It is. Well, Scott, asking if it's safe finally to relax. Now, maybe it seems a little rich, right? We're up 10 percent off the lows and now it's time to relax a little bit. If we dial back a few weeks when we started this thing, the line was people were way too negative. The market was over. So we're due for a bounce. But that bounce would face a pretty high burden of proof in terms of how persistent it was, whether in fact the macro stress indicators were relieved along the way. And I think all of that has pretty much fallen into line. And the action today, led by the big growth stocks, which have lagged

and therefore perhaps have some room to catch up, usually the market is just in a much more kind of balanced state when you have those stocks working. There are such huge market caps, and it clears the way for a lot of other things to maybe rest and reset. So all that being said, I think really all that's happened is we thought the market could have gone down more on a lot of the obvious concerns. It refused to. And so therefore, maybe all the things we're worried about, which is all on the come. People talking $200 oil hasn't happened. People talking to what the yield curve means. Well, that's still up for speculation. None of it is manifest in the earnings estimates so far or really even in the real time economic data. So here we are. All right. Thank you. Mike Santoli with his last word. Just relax. Coming up, three top picks for your portfolio over time.

We'll be right back. Results of our Twitter question of the day now the best musk trade is it tesla twitter or other well tesla was the big winner 62 two-thirds think tesla is the best musk trade twitter second other and i'm told we were getting a lot of dogecoin write-ins go figure it's time now for the two minute drill three top stocks for your portfolio with us now is Wall Street Alliance Group's Adil Zaman. Adil, you are on the clock. You saw Twitter, excuse me, Tesla won our poll, and that's one of your top picks. Yeah, so great to be with you, Scott. So Tesla's Model S Plaid goes from zero to 60 within two seconds. The stock is up about 30 percent

within the past two months. You know, this is the most exciting stock out there. And because of fuel prices skyrocketing, more people are going to gravitate towards electrical vehicles because it's three to five times cheaper per mile, the driving cost of electrical vehicles. So we think that Tesla is going to be a big beneficiary of this trend and we love the stock. Wait, the most exciting stock out there in the entire market of stocks is Tesla? We love this stock. You know, this company like Apple's iPhone is the dominant phone, smartphone. We feel that Tesla's electric vehicle is the dominant electric vehicle. It represents to consumers luxury within reach.

You know, consumers are willing to pay the high price because there are plenty of cost-efficient financing options available to them. And we feel the stock split could be an interesting catalyst as well. So we like the stock. Okay, within reach is assuming they can keep up the pace on deliveries, obviously. Netflix down 30 plus percent year to date. Why is that on your list? Will Smith's slap caught the attention of everyone during the Oscars. But we think that the hidden gem is Netflix. With 27 Oscar nominations, they're producing really high quality content. And the future of content consumption is streaming. And we feel that Netflix is the leader there with 222 million subscribers. It's still the king in that space. And the stock's down about more than 30 percent year to date. We see an opportunity there.

Quickly, real quick on Deer, D-E-E-Y. And real quick, please. Deer is linked with the U.S. farmers. We feel because crop prices are up, DEY is going to benefit because farmers will have more money in their pocket to buy farm equipment. So we think this is a great industrial pick in the portfolio. Adil, I appreciate it very much. Thank you. A quick reminder, don't miss tomorrow in overtime. The legendary investor Lee Cooperman will be with us right here.

I hope you will join us. It does it for us. Fast Money begins right now.