Closing Bell - Closing Bell Overtime: Buy the Tech Breakdown 9/16/22

Episode Date: September 16, 2022

It was a tough week for stocks – especially tech. So, is now the time to buy the dip? “Mad Money” Host Jim Cramer gives his expert market take. Plus, Fundstrat’s Tom Lee is sticking to his bullish stance – calling for a big comeback heading into the end of the year. Capital Wealth Planning’s Kevin Simpson is back … and this time he sees Fedex’s big warning as a big buying opportunity.

All right, sir. Thank you very much. TCU is ringing the closing bell here today in honor of that school's 150th anniversary. Congratulations and great to see everybody here at the New York Stock Exchange. Welcome to all of you in overtime. I'm Scott Watney. You just heard those bells were just getting started right here at Post 9 at the NYSE. In just a little bit, I'll talk to Fundstrat's Tom Lee about how, given all we know about the Fed and the economy, he is still bullish on stocks for later in the year. Now, maybe the contrarian view is actually the right one. We'll probe into that with Tom Lee.

We begin, though, with our talk of the tape. That sudden surge mid-afternoon in shares of Netflix and whether it's a sign that some Nasdaq stocks have come down too much to ignore. Been a rough week for tech in general. Is it a buying opportunity? And what are we to make of the markets today and this week? As we've ignore. Been a rough week for tech in general. Is it a buying opportunity? And what are we to make of the markets today and this week? As we've said, a very rough week.

Let's ask Jim Cramer that very question. He is here, of course, the host of Mad Money. He's got his new set and he's going to be over there in a couple hours time. Joe Terranova is also here. Just got out of his NASDAQ 100 trade earlier in the week.

Thank you so much for being here, man. Oh, of course. Come on. This has been a very big week, and thank you, Joe, for seeing me, too. I'll tell you, September's a tough month. I mean, that's what happens. In advance of Klan, that wasn't that bad today. I can overlay, believe it or not, 1962. This is something Larry Williams, the great market historian,

was showing me almost in a day. But we're about to go up. Here's the problem. It's things like last night with FedEx. Yeah. Where you basically want to say it's not the end of the world, then you're told it is. And in fact, it probably really isn't. So I'm telling people, Joe, you know this too,

that if you're going to take your cue from the action, you're going to miss some pretty good opportunities. So you had the CEO of FedEx on last night. The commentary has evolved over the trading day of look out below. This is a quick devolving situation in the economy to you know what? Maybe this is FedEx's problem and not everybody else's problem. I'm so glad you put it this way because I started off thinking it was 70% of the macro, meaning what's China, what's Russia, what's United States, what's Europe, and 30% FedEx.

As the day went, I started thinking, let's make it 60% world, 40% X, because in the end, I know this sounds shocking, but the revenues weren't that bad. It was the bottom line, which means they've got some real fat Joe. So is UPS OK? She took the medicine. See, now I'm sure there's still some. Obviously, the macro is not gone. But she took the medicine when the economy was good.

And Raj has got to take the medicine when the economy is bad. And that's what's so tough. The vote, if you want to call it that, in the market today evolved just like the story about FedEx, too. I mean, it's no secret that the market closed well off of its lows. If the market was so concerned that FedEx was telling you a canary in the coal mine story, the market wouldn't have come back the way it did. Now, obviously, a 27, 28 point decline on the S&P 500. We're closed. We closed below 3,900. Isn't great. I think the market started to snip this out, too.

Look, we did halftime together, and I think you could sense the concern that I had for the market. Friday afternoon, options expiration, all these, you know, leveraged ETFs that at the end of the day exacerbate the selling pressure. I was worried about today, right? So was I. I'll take this. This is not so bad. I was trying to, you know, put my best Herbert on. And then I was feeling the tightest. Good game. But I think you're right. I think that what's happened here is that there are two man-made problems. One, I'm this President Xi who somehow feels that you can beat a disease that can't be beaten. Everybody has to get it in the end.

And then you've got another man, Putin, who's causing a very small country, causing a war that's shutting down Europe, where he meets with Xi. Xi doesn't seem to be that happy. I mention these because these are man-made. And FedEx's problems would not go away if these man-made problems went. But there are reasons to believe that you can't just constantly bet against everything good happening. I mean, it's just, you know, Scott, you know that when President Xi meets with President Putin, he did not say, way to go, you're creaming, you're crushing it. No, because he's a realist. He's a transactional president. You made the point really, Jim, from the moment the CPI came out, you know, sell some stocks at your peril. And it goes to where I led off today in

overtime here with this. You know, it was a midday big buy of Netflix, I'm told, leaked out, stock popped. You could see it on an intraday chart, finishes up two percent, five bucks in a bad tape. It raises the issue for me as to whether some of these stocks that have gotten clobbered, like a Netflix from 700 to 236 or 162 is the 52-week low, is too good to pass up. What do you do? Craig Jelinek sits down with me for a while, the CEO of Costco, this week. He said, boy, business is really fabulous. It's pretty amazing. I'm taking a chair for my break. I figure, OK, so maybe down 20% you buy it. Home Depot, I sit down today with Ted Decker,

his business is really booming. I figure, hey, down 20%, but we're going to have to get away from the mindset of down 20% it gets interesting, because pretty soon they're not going to go down 20%. Well, I also think, and I think you know this as well, first of all, I don't think today had anything to do with retail. I don't think this was retail. I think this was all the algos, the rules-based systematic funds that are in the market.

I think you're right. And I think both in the case of Netflix and Tesla, and I would tell you I think you're okay in each of those stocks. What you're seeing algos doing is they're picking up on relative outperformance. So they're saying stocks peaked in November, bottomed in May, never made another low. Never made another low. Why does no one else talk about that? Both Tesla and Netflix. And now in the last five days, guess what?

The S&P is down 5%. Netflix, even without today's gain, was still higher. And Tesla is modestly higher. So the algos are attracted to that relative outperformance. They're stepping in and buying it. Are they attractive to selling FedEx even down 40, down 40, I mean the other way too? I think so. Yeah, I do too.

I want you guys to, Jim, I'd love your take on what Brad Gerstner of Altimeter told me yesterday when he was on. Well-known investor, especially in tech. Very smart. About opportunity and risk. Here's what Gerstner said about buying this pullback in a lot of these stocks, how he sees things going from here. Take a listen. If you need to make money over the next 90 days, it's a pretty treacherous place to be. But if you want to find great companies that you can compound in over the next three to five years, we think this is a very fair place to enter those names compared to last fall that we all know the multipliers were quite high. So that's Gerstner, who revealed yesterday with me, Jim, that he

bought Tesla recently for the first time, I think in a while, if not ever. What do you make of what he said? Look, I think he's right. For the Chabot Trust, we've moved into a lot of very defensive stocks. And I found myself thinking, look, this is one of the most over-owned retail names. It's unfortunate for this. I found myself thinking, you know, when NVIDIA is cut by two-thirds, don't you just start thinking maybe buy one with NVIDIA? AMD, the last time I checked in with Lisa Su, the stock was 100 points ago.

Now, those are the two most over-owned. So those are very tough. Right. My chapter's done some, too. But, you know, we are. How about this? We surely ain't coming in at the top. And there are many times in my career where I have regretted not buying right now.

However, I usually don't have any cash. I've got so negative, I got some cash. We had a meeting this week where I said, you know what? We have to buy some Procter & Gamble. And my partner, Jeff, said, a little dangerous. What? OK. Procter & Gamble. When we all think Procter & Gamble is a little dangerous, which we do, what does that say? I mean, you can come right back and say 3M does seem dangerous, but they have a litigation risk. Procter's got a liner board risk. Liner board may go down so quickly that they could make even more money.

I think on Brad's comments, and this is where you have to make the determination, is your enemy price or is your enemy time? Scott Minard says market could go down 20%, but I'm a buyer at that 20% down. And I think, listen, if you think this is 1973, 2000, or 2007, then you don't want to buy 20% down. Because it takes four or five years for the market to recover. That's not the scenario that I think we're in.

I don't think people are afraid so much of the price, the capitulation. I almost think people want it because they see the recovery on the other side. The problem is, is if time is your enemy, and this is a prolonged malaise. I don't think it is. But let me give you a piece of paper I bought. It's the most overvalued, parabolic piece of paper I've ever seen. It's one that if it were stock, go like this,

all three of us would say, that's a short. Is it the two-year? Is it the two-year? I bought the two-year. I haven't bought the darn two-year since March 15th of 2000. And, you know, I can't touch this money because of age. But, you know, I got two years before I can touch it. So if you're, hey, I'm getting.25 at J.P. Morgan.

Thank you there, Jamie. Or I can get this piece of paper. I mean, honestly, is this thing not a 1999? Isn't this Qualcomm? So I'm glad you bring that up because some now suggest that bonds are the best game in town. Who said? After being, you know, pushed out of the sidelines. Gundlach in his webcast. Oh, that was such a good.

Did you catch that? Here's what he said. If you really want to go for it and you should, my advice is sell stocks and buy opportunistic bonds. It was brutal to be a bond investor for the past several years. Now it's actually the place to be. And the opportunities are more exciting now than any time, in my view, in the past 10 years. Two years exciting. I mean, it's got genuine drama to it.

Because everyone's waiting for you to go to four. And I'm saying, OK, let's say I don't need my money for two years. I can go buy Clorox Kimberly, try to get some yield. Or I can go buy this thing that's backed up by the full faith and credit of whatever the hell. And you know what? I'm going for the hell. The problem is, for stocks, is that competition. Well, I mean, at a certain point, this thing breaks.

It can't just go straight up forever. It is not, I don't know, Infospace. Remember that one's supposed to go to the first trillion dollar stock? I mean, it's not. I mean, you know, we can't have a piece of paper go straight up and think that all it's ever going to do is go straight up, unless it's like, you know, a short of the Turkish lira. Listen, in bonds, I said on halftime today, I think you extend duration. The economy is going to contract. If you believe the Fed is close to the end or should be close to the end, however you want to make that determination, you extend duration here. And you get the opportunity to extend duration for the first time in several years.

That's what Gundlach likes. That's what he told me out in California the other day, too. I thought that was fabulous. You know, Gundlach and then Barry Sternlich, I mean, these are two people who are pretty rigorous thinkers. And they're questioning where to put your money. When Sternlich was on yesterday on Spock, I said, oh, boy, he's going to just trash Powell. He's going to say, why didn't you move faster than the usual course? Instead, he's saying, whoa.

Doing too much. Whoa. We're seeing things go wrong like you wouldn't believe. And let's go back to FedEx. I mean, FedEx is a real company. And businesses are turning down. Adobe. Now, then again, I was talking with one of my colleagues and said, oh man, Adobe has been cut in half. That's starting to get interesting. Well, and then you look at the chart and you say, maybe it goes down even. This notion of Sternlicht saying that the

Fed is going too fast, too aggressive, Gundlach saying, you know, if the CPI hadn't been as hot as it was, he was thinking the Fed shouldn't do anything. I know, but then you had Jason Furman on today, and Jason, who's a very nice man, is saying, look, the Fed isn't looking at anything. They're just looking at basically help wanted signs. And I'm not going to go against that. I mean, the Dave Teppers of the world, other than the fact that their teams are not that good,

that's a reference to the Panthers, and I know you on the team. Giants. But here's my problem. When you look at guys who are smart like a Tepper, they say the Fed needs to make your house worth less. He doesn't say it from a plank. I'm just saying, look, your house has got to go down in price. This is something I talk about with Home Depot. And you've got to see the end of the help wanted signs.

And what that means is you've got to bring people back to work who thought that they had saved enough that they'd be able to be fine. But see, it goes back to the conversation we were just having. In turn, by making your house worth less and cutting demand, they're also making your tech stocks worth less. They have to. Because as rates continue to go up, those stocks continue to go down. I noticed NVIDIA was up today on the day. It's down 11% on the week. Big meeting next week. But all these stocks, Jim, are down. Apple on the week, 5%. Amazon, 8.5%.

Alphabet, Microsoft, 8.8%. I mean, I'm buying the 14th. But I'm shorting Apple? I can't short. But I'm saying... But Apple was at 164, but not even a week ago. It was a 5 going into launch. Look, those stocks are the most hated stocks on Earth.

You have a list. What is that? That's like a Halloween, a psycho. Is that psycho? And then what is that, berserk? I mean, you know, these are Freddy Krueger stocks. And yet they're great companies. Do you buy them here or do you feel as though they have more room to go down? At the meeting for my travel trust, we said they had more room to go down? At the meeting for my travel trust, we said they had more room to go down

so that we didn't want to be tight and buying. You know, I said it. I mean, I can't say today, now, I like them. I do like the companies very much. I also had some folks on halftime this morning from the committee taking some profits in things like UnitedHealth, the Home Depot, in which you have the CEO on Mad Money tonight in about an hour and 45 minutes.

I don't want to take profits in UAH. My child trust owns Humana, though, and we took a little profit in the analyst meeting because the stock spiked. Not selling all, but trimming a little bit because it's been a red-hot place to be. Right, but look at Danaher. They announced this incredible spin.

They raised their forecast, and the stock goes down. Now, that is true bear market activity. But how long can that last? How long can you just sit there and ignore every good piece of news? Joe, you know there are some good things happening, some bad things happening. But right now, it really doesn't matter. I mean, I really want to tell Ted Decker from Home Depot, look, I don't really care that you're crushing it. Don't you understand your stock? But he's not. He's a business person. And so if you want to, apropos of what you said, wait a little bit. Ted Decker is crushing everyone at Home Depot. That doesn't mean that you have to go buy a stock today, but it does mean that if the stock goes down, it's interesting. Are you are you worried going into the Fed meeting that that Powell's going to be more hawkish than some like Sternlicht and Gundlach and others suggest he should be.

I am worried that we've got the rookie Powell from October of 2018. You do because you had— I'm worried. I'm worried. Most recently, you had put your full faith and trust behind the guy. I am. I think he's going to do it right. But I cannot be so glib as to say I know he's going to do it right. But I cannot be so glib as to say, I know he's going to do it right. Do it right is.75. Strike three is coming. Do it right is 7.5 and then nothing and then wait. 7.5 and then you know what we're going to do? We're going to go

back to being data dependent. We actually see many signs of rollover. Not all. You remember, they don't have cars, they don't have rents, they don't have wages. Those are all very sticky. I cannot believe they don't have cars yet. That's really the fault of car makers. Rents, they don't have cars, they don't have rents, they don't have wages. Those are all very sticky. I cannot believe they don't have cars yet. That's really the fault of carmakers. Rents, we can't build housing fast enough. That's a problem. And wages, he doesn't want to see, he does not want to see a help wanted sign. He just doesn't. I mean, I want to go to all the places he goes to in Washington, D.C. and just take those signs down. So maybe he's a little more sanguine, but he's not. And then during that ridiculous press conference he has,

hey, Mr. Jerk, what are you thinking? No, I mean, he's under fire. But I think he should have the conviction to do.75 and then say, you know what? We're going to go back. We're going to be data dependent. And then, you know, let's see because we're putting on, these are massive rate increases. They're massive. Unprecedented. Unprecedented, exactly. And part of the issue is that, you know, the critics would suggest that they haven't given it, no one's given it long enough to get through the system yet.

And the Fed is going to oversteer, as Gundlach puts it, those are his words, because they haven't allowed all of this to filter through the economy yet. It could take 12 to 18 months for those rate hikes of that degree to filter through the economy, yet it could take 12 to 18 months for those rate hikes of that degree to filter through the economy. And it's simply too soon. But is there the patience to let it filter through and deal with inflation where it is in the time being? That really is a question that the Federal Reserve needs to answer. And it's going to come down to humility. He's going to have to recognize that he's going to have to move away from a very hawkish position that he's been communicating here over the last several months.

Right, right. And 6.2 percent. I mean, it just reports that morning. It goes back to, you know, this time last year, probably should have moved a little faster than he did. Probably. We were still buying. He admitted it. Come on, he owned it. Okay, but, you know, the problem that the market right now

in this period has, you don't have earnings. You don't have buybacks. You don't have buybacks. The window closed, what, yesterday? Buybacks. No buybacks. You have midterm elections coming, and every decision really just comes down to what's the Federal Reserve going to do next? I know. And that's a bad place to be. I'm telling you that two-year, that thing's going to break. Leave us with a last thought for the weekend. Again, we're going to watch it tonight, of course, with the CEO of HD. Leave us with a thought. I want to go back to actually a Peter Lynch moment at Grapefruit Farm. If you have a company that you really like, I mean, you go to

Home Depot and you really love it, maybe you get started. You buy a little. I'm pushing Procter tonight on my show. Why? It's down a lot, but plastics come down faster and liner boards come down. You know, that's who Procter is. I mean, I like to think that Procter represents Einstein meets Mozart, but it really is liner board meets plastic. I'm going to ask you this Twitter question before I let you go, because we're going to ask everybody once you leave. The most attractive asset right now, is it bonds? Is it the dollar? Is it stocks?

Or is it something else? The most attractive asset right now. What would you vote right now? Because I'm going to ask the folks on Twitter to cast their vote, and you can do it right now. I'm going to have to say non-tech stocks. Non-tech stocks. At CNBC Overtime, please do your vote there. We'll give you the results at the end of the show. You heard Jim. So it's still stocks over bonds, but not tech stocks. I got to go. I got to get ready. You got a big show coming up. I know. Home Depot CEO. I just want to explain to people. You didn't want to pick the dollar. I do. I do. I hate the dollar here. I just came back from Italy.

Look at these. These are these crummy Rockports. Okay. I paid $140 for this cheap Thai Rockport. Look how ugly it is. Do you know what? I got two for one. Unbelievable Italian shoes in Florence.

Beautiful shoes. They're too nice. No, those are worse than Rockport. And I'm thinking, that's an asset that I want to, like, tram into? I mean, when I'm getting up, did you see how ugly these are? He sends Rockport, he sends his apologies on behalf. $40? I send them on behalf of Tim.

It's called BOGO, my friend. Buy one, get one. Enjoy your show. We'll be watching. Have a great weekend. Thank you so much. And by the way, I picked up Wentz. There you go.

You can have a good day. There you go. All right. All right. That's Jim Cramer, everybody. Don't forget, tonight, I picked up Wentz. There you go. You can have a good day. There you go. All right. All right. That's Jim Cramer, everybody. Don't forget, tonight, Home Depot, 6 o'clock Eastern time. We're just getting started here in overtime. Up next, calling for a comeback.

Fundstrat's Tom Lee is sticking by his bull case for stocks. Why he still sees serious upside, despite a growing number of big-name investors calling for a big drop. We're going to press him when overtime comes back. We're back now in overtime, the market wrapping up a tough week. The S&P down more than 5 percent. One steadfast bull, though, sticking to his case for a year and come back. CNBC contributor Tom Lee, he's the head of research at Fundstrat Global Advisors.

He joins me now. You know, Tom, I have to admit, when I have you on, people say, why do you keep having him on? He's too bullish. He says the same thing about being bullish every time. And I say, I got to have you on because everybody else is negative. So we got to press the case and find out how you can remain so bullish for the remainder of the year in the face of what is overwhelming negativity from most. How do you how do you stay positive thinking that stocks can still do well when most others think they cannot? Oh, Scott, I think a lot of this has to do with, I mean, I don't think the right word is myopia, but I think investors have what I call recency bias.

You know, that we've got really bad inflationary data now, and we've got negative price momentum, and in that combination, investors basically are negative negative but they can't necessarily see how things can inflect and i think one of the most important inflections that has already taken place but the second leg comes early next year is that inflation has peaked i don't think the august cpi report has changed that and if you look at what the bond market saying it's saying that by the middle of next year inflation using swaps is going to be around two and a half percent so you're talking about inflation dropping from eight percent today to four percent early next year to two and a half percent and that means

the feds in terms of hiking is going to be done sometime early next year and that didn't change with the CPI, maybe the level of hikes that we're getting to, but the data of those peaks isn't changing. And what I think is the most important is when the Fed has sort of vanquished inflation, and you know that, I don't, you know, even Alan Blunder said, you know, this is kind of a young inflation, not going to take decades to fix. Then corporate America is emerging from a time where they survived COVID and didn't see profit margins collapse. And then they went through a two-generation level of inflation never seen, and then they survived. To me, that's going to be taking out a huge tail risk out of equity risk premium. When we see markets convinced inflation

is broken, PE is going to go up dramatically. And I think that that's the mood change that's going to take place. We actually think it could happen as early as the October CPI, which is in a few weeks. So, yes, we are sticking to our constructive view. But again, I think we're trying to look past this recency bias. Yeah. Speaking of recency, FedEx, that doesn't give you any sort of pause that it's a canary in a coal mine, that it's the first of many to come out and warn and therein lies the biggest problem? Scott, you know, you always have to pay attention to transports because they're a pretty good real-time and early sort of barometer of economic activity. But I just think we've got to mitigate

that in three ways. Number one, FedEx preannounced is down 20 percent. And on the day that it preannounced, it's down huge. The market's down kind of in line with some of the weakness all week. It hasn't accelerated the sell off. Secondly, we don't really want FedEx to announce upsides of price to earnings because I think then you'd see markets raise up their hands again and actually raise FedEx expectations. In fact, you know, we saw the 10-year kind of cool today. So from a timing of what happens next year, it's actually a good thing. And I think the third thing just to keep in mind is, you know, FedEx, and there's a lot

of commentary about it today, it shouldn't be a surprise to the extent that they did build up a lot of capacity into this year. And we've got to slow down the rest of the world. And, you know, I mean, if investors think that you've got to take down earnings for the market because of FedEx, that might be true, you know, to some smaller beta. But they're forgetting that the P.E. is going to change dramatically when inflation risk is taken out of equity risk. I mean, part of the problem of why people are concerned about FedEx is it was just the end of June, June 20 something or other, where they gave a bullish guide and then said that the macro is deteriorating much faster than they thought. Michael Hartnett, Bank of America, points to that today, talks about the possibility of an EPS recession shock, which would be the catalyst for new lows in stocks. Nibble at 3,600, Byte at 3,300, Gorge at 3,000. The point being, 3,600 is about 300 points lower than where you're at now.

Yeah, I mean, you know, there's probably some greens to it, but FedEx is not a leading indicator of demand in the sense that consumers have to order and businesses have to order. And I think in some ways what we've seen play out this year is the supply chain's ungummed and companies are now trying to unload inventory. To me, that's the movement of a lot less packages at that cop FedEx flat-footed %uh that's one thing if the economy was flying your credit card data isn't showing a huge drop but we had some retail sales

it was pretty decent so %uh it sounds to me like a capacity air more than an economy being a wall since June by mean the credit card issue is a one in and of itself, too. You know, credit card data is not going to show a slowdown because more people are putting stuff on their cards right now because they're light on cash and inflation is taking its obvious toll. Let me ask you this. You've said all along to continue to buy technology. Kramer just sat to my left two seats away and said he still likes stocks as the best

asset class out there, just non-tech stocks. Why should I continue to buy tech in this environment? It seems counterintuitive at best, silly at worst. Well, tech's been caught in the maelstrom. They've been really affected by the change in cost of money. But since 1970, every major market bottom has been led by tech. So we know why that happened, because tech really has huge operating leverage of stories. They're generally less levered. And if we're talking about risk premium coming down, they're going to benefit. And I think from a timing perspective, the NASDAQ 100 had zero stocks advance on September 13th. It's only happened 12 other times since 1980. When the market's been down, when the NASDAQ's been down 25% or more, at the time you get that sort of zero advance your day, the median 12-month return is 60%.

The median six-month return is 30%. So tech is looking pretty timely. But again, I know I'm not saying it's going to turn tomorrow, but for someone to kind of give up on tech here is to really say 40% of the equity market in the S&P is no longer appealing. And I think that's a mistake. I mean, the way out of inflation is to longer appealing and i think that's a mistake i mean the way i inflation is to be for companies to spend more money on technology and we can see so much innovation in space

what the lines out the door to get the iphone is just example of the second sts you know still lastly before i let you go uh... and we do gotta go by the fed next week. What are they going to do? Well, you know, I think that they've gained a lot of credibility. And investors think that Fred has lost credibility. Look at how the market's reacting to Jackson Hole. I think 75 is baked into markets. But I think that what's going to be interesting is the window between now and November, because we are going to get two more inflation reports.

You know, people think goods inflation doesn't really sway. It's it's really what drives a disinflation cycle is goods deflating. And that's where we're seeing. So I think in the next two months, the Fed could actually start to become less hawkish. But I think September should be no surprise. Seven basis points and tough talk. All right. We're going to leave it there. Another reason why I like to have you on, Tom, you have conviction in your view and you answer all my questions. I appreciate that. I hope our

viewers do as well. We'll see you soon. That's Tom Lee of Funstrat joining us. It's time for a CNBC News update with Tyler Matheson. Hey, Ty. Scott, thank you very much. From the news on CNBC, here's what's happening in London. King Charles and his siblings have held a silent vigil around Queen Elizabeth's coffin. They stood with heads bowed for about 15 minutes as members of the public continued to pay their respects. President Zelensky of Ukraine says torture victims were found in a mass burial site left behind by retreating Russian troops. Ukrainian officials say some 440 graves were found. The White House calls the reports horrifying and repugnant. And in West Virginia, a near total ban on abortions is now the law.

It is the second state to enact such a law since the Supreme Court struck down Roe v. Wade. The law contains limited exceptions for medical emergencies and rape and incest victims early in their pregnancies. Tonight, deadly flooding in Italy and the storm threatening to dump punishing rain on Puerto Rico, the U.S. Virgin Islands and more. Join me tonight on the news right after Jim Cramer, 7 o'clock Eastern, here on CNBC. Back to you, Scott. All right, good stuff. We'll be there, Ty. Thank you. That's Tyler Matheson. Up next, another tough week for stocks. Some of the biggest names on the street calling for huge declines ahead. How to position your portfolio heading into a very big week for your money. Overtime's right back. We're back now in overtime. The market wrapping up a tough week.

The S&P down more than 5%. One steadfast bull, though, sticking to his case for a year-end comeback. CNBC contributor Tom Lee, he's the head of research at Fundstrat Global Advisors. He joins me now. You know, Tom, I have to admit, when I have you on, people say, why do you keep having him on? He's too bullish. He says the same thing about being bullish every time. And I say, I got to have you on because everybody else is negative. So we've got to press the case and find out how you can remain so bullish for the remainder of the year in the face of what is overwhelming negativity from most. How do you how do you stay positive thinking that stocks can still do well when most others think

they cannot oh scott i think a lot of this has to do with uh i mean i don't think the right word is myopia but i think investors have what i call recency bias you know that we've got really bad inflationary data now, and we've got negative price momentum. And in that combination, investors basically are negative, but they can't necessarily see how things can inflect. And I think one of the most important inflections that has already taken place, but the second leg comes early next year, is that inflation has peaked. I don't think the August CPI report has changed that. And if you look at what the bond market's saying, it's saying that by the middle of next year, inflation using swaps is going to be around 2.5%. So we're talking about inflation dropping from 8% today to 4% early next year to 2.5%.

And that means the Fed's, in terms of hiking, is going to be done sometime early next year to 2.5%. And that means the Fed's, in terms of hiking, is going to be done sometime early next year. That didn't change with the CTI. Maybe the level of hikes that we're getting to, but the date of those peaks isn't changing. And what I think is the most important is when the Fed has sort of vanquished inflation, and even Alan Blunder said, this is kind of a young inflation,, and you know that, I don't, you know, even

Alan Blunder said, you know, this is kind of a young inflation, it's not going to take decades to fix. Then corporate America is emerging from a time where they survived COVID and didn't see profit margins collapse. And then they went through a two-generation level of inflation never seen, and then they survived. To me, that's going to be taking out a huge tail risk out of equity risk premium. When we see markets convinced inflation is broken, PE is going to go up dramatically.

And I think that that's the mood change that's going to take place. We actually think it could happen as early as the October CPI, which is in a few weeks. So, yes, we are sticking to our constructive view. But again, I think we're trying to look past this recency bias. Yeah. Speaking of recency, FedEx, that doesn't give you any sort of pause that it's a canary in a coal mine, that it's the first of many to come out and warn and therein lies the biggest problem. Scott, you know, you always have to pay attention to transports because they're a pretty good real-time and early sort of barometer of economic activity. But I just think we've got to mitigate that in three ways.

Number one, FedEx preannounced is down 20 percent. And on the day that it preannounced and it's down huge, the market's down kind of in line with some of the weakness all week. It hasn't accelerated the sell-off. Secondly, we don't really want FedEx to announce upsides of price to earnings because I think then you'd see markets raise up their hands again and actually raise FedEx expectations. In fact, we saw the 10-year kind of cool today. So from a timing of what happens next year, it's actually a good thing.

And I think the third thing just to keep in mind is FedEx, and there's a lot of commentary about it today, it shouldn't be a surprise to the extent that they did build up a lot of capacity into this year, and we've got to slow down the rest of the world. And, you know, I mean, if investors think that you've got to take down earnings for the market because of FedEx, that might be true, you know, to some smaller beta. But they're forgetting that the P.E. is going to change dramatically when inflation risk is taken out of equity risk. I mean, part of the problem of why people are concerned about FedEx is it was just the end of June, June 20-something or other, where they gave a bullish guide and then said that the macro is deteriorating much faster than they thought.

Michael Hartnett, Bank of America, points to that today, talks about the possibility of an EPS recession shock, which would be the catalyst for new lows in stocks. Nibble at 3,600, Byte at 3,300, Gorge at 3,000. The point being, 3,600 is about 300 points lower than where you're at now. Yeah. I mean, you know, there's probably some creeds to it, but you know, FedEx is not a leading indicator of demand in the sense that consumers have to order and businesses have to order. And I think in some ways what we've seen play out this year is the supply chain's ungummed and companies are now trying to unload inventory. To me, that's the movement of a lot less packages. If that caught FedEx flat-footed,

that's one thing. If the economy was slowing, you know, credit card data isn't showing a huge drop-off. We had some retail sales that was pretty decent. So it sounds to me like a capacity error more than an economy hitting a wall since June. Well, I mean, the credit card issue is a one in and of itself, too. You know, credit card data is not going to show a slowdown because more people are putting stuff on their cards right now because they're light on cash and inflation is taking its obvious toll. Let me ask you this. You've said all along to continue to buy technology. Kramer just sat to my left two seats away and said he still likes

stocks as the best asset class out there, just non-tech stocks. Why should I continue to buy tech in this environment? It seems counterintuitive at best, silly at worst? Well, tech's been caught in the maelstrom. They've been really affected by the change in cost of money. But since 1970, every major market bottom has been led by tech. So we know why that happened, because tech really has huge operating leverage of stories. They're generally less levered.

And if we're talking about risk premium coming down, they're going to benefit. And I think from a timing perspective, the NASDAQ 100 had zero stocks advance on September 13th. It's only happened 12 other times since 1980. When the market's been down, when the Nasdaq's been down 25% or more, at the time you get that sort of zero advance your day, the median 12-month return is 60%. The median six-month return is 30%. So tech is looking pretty timely.

But again, I know I'm not saying it's going to turn tomorrow, but for someone to kind of give up on tech here is to really say, you know, 40 percent of the equity market in the S&P is no longer appealing. And I think that's a mistake. I mean, the way out of inflation is to be for companies to spend more money on technology. And we see so much innovation. I mean, today's lines out the door to get the iPhone is just an example of tech is still coming. Lastly, before I let you go, and we do got to go, the Fed next week, what are they going to do? Well, you know, I think that they've gained a lot of credibility. And investors think that Fred has lost credibility. Look at how the market's reacting to Jackson Hole.

I think 75 is baked into markets but i think that what's going to be interesting is the window between now and november because we are going to get two more inflation reports uh you know people think goods inflation doesn't really sway it's it's really what drives a disinflation cycle is goods deflating and that's where we're seeing so i think in the next two months uh the fed could actually start to become less hawkish. But I think September should be no surprise. Seven basis points and tough talk. All right. We're going to leave it there. Another reason why I like to have you on, Tom, you have conviction in your view and you answer all my questions. I appreciate that. I hope our viewers do as well. We'll see you soon. That's Tom Lee

of Fundstrat joining us. It's time for a CNBC News Update with Tyler Matheson. Hey, Ty. Scott, thank you very much. From the news on CNBC, here's what's happening in London. King Charles and his siblings have held a silent vigil around Queen Elizabeth's coffin. They stood with heads bowed for about 15 minutes as members of the public continued to pay their respects. President Zelensky of Ukraine says torture victims were found in a mass burial site left behind by retreating Russian troops. Ukrainian officials say some 440 graves were found. The White House calls the reports horrifying and repugnant. And in West Virginia, a near total ban on abortions is now the law. It is the second state to enact such a law since the Supreme Court struck down

Roe v. Wade. The law contains limited exceptions for medical emergencies and rape and incest victims early in their pregnancies. Tonight, deadly flooding in Italy and the storm threatening to dump punishing rain on Puerto Rico, the U.S. Virgin Islands and more. Join me tonight on the news right after Jim Cramer, 7 o'clock Eastern, here on CNBC. Back to you, Scott. All right, good stuff. We'll be there, Ty. Thank you. That's Tyler Matheson. Up next, another tough week for stocks.

Some of the biggest names on the street calling for huge declines ahead. How to position your portfolio heading into a very big week for your money. Overtime is right back. Stocks closing out a tough week in the red, as you know. So what's at stake as investors gear up for that crucial Fed meeting next week? Let's bring in CNBC contributor Shannon Sekosha of SVB Private, Alicia Levine of BNY Mellon Wealth Management. Ladies, great to see both of you.

Alicia, to you first. So where does this leave us heading into next week? So, look, you know, we sold off dramatically this week, headed into a Fed meeting, which is more or less consensus at 75 basis points for Wednesday's announcement. So in some ways we've de-risked the Fed meeting. A lot of negativity here. Obviously the data is not supporting that soft landing yet, forcing the Fed to possibly go higher. The market's already pricing in a 4.4 percent terminal Fed funds rate.

If it goes much higher than that, if we get above 4.5 percent, I think we could see further downside to the market. But as it relates to the FOMC next week, I think we've pretty much de-risked that meeting. I mean, there's a lot of negativity. We've already taken price action down. Yeah, it depends who you are, though. I mean, there's some who say that the Fed just increases its risk every time it does anything or speaks because it's more hawkish than it should be. You have calls, Shannon, big decline calls, minor, Dalio, Gundlach.

Do you agree with any of them that stocks can go down 20 percent from here for a variety of reasons, including aggressive Fed? Well, there's always an opportunity for stocks to fall, especially when there's this intersection of so much risk. But I think 20 percent and the time frame is important, Scott, with these calls. We're really hearing for that to be really over the short-term time period between now and just before the midterms. That seems not necessarily supported, in my mind, based on just earnings where we see them today, some of the economic data. But I think what the important point is here is that is the Fed being too aggressive? Because just as they did coming into this where they thought that inflation was transitory, they were not anticipating or adapting to the fact that we saw a lot of

producer prices rising much quicker than CPI was at this time. I think the mistake the Fed could make and why I think there could be a significant decline here is if they get too aggressive based only on the CPI print and they're not looking at those secondary and tertiary data points, such as prices paid in the PMI, for the improvement that we are seeing further upstream in the production process. I want to talk about technology for obvious reasons. It's been a rough week for NASDAQ, Alicia. Jim Cramer just on with me. These stocks, speaking of mega cap tech, these stocks are the most dangerous stocks on earth. Says he still likes stocks, just not tech ones right now.

What about you? Look, tech has been really tough. And it's been tough because pretty much the long duration names in the equity market, which are tech, are following what's happening in the bond market. So the equity market has been dependent on where yields have been going here. I think what's interesting in some of the price action today, if you look under the hood, the more speculative names, which had huge selling earlier in the year, have more or less stabilized. And now you're taking down top of house. Top of house, which supported the S&P and which really was the

place that people were hiding to be exposed to tech and not be exposed to these more speculative names. Those are the ones that are coming down. I do think there's still risk there. And as I said, if the 10-year breach is three and a half percent percent there is another leg down there but but i'll say this it's getting tempting and because now we have the earnings cycle starting to move lower and we have it's kind of baked in that earnings must move lower because we are headed towards a cyclical slowdown once that happens then tech will be the place to go to because yields will come down and that's where you want to be but you got to get from here to there. And it's not really a pretty picture to do that. I understand. Shannon, your take on tech, big tech. I don't want to talk about, you know,

once high flying arc like names. I want to talk about the biggest, heavily, most heavily owned names in this group. Are they the most dangerous to own right now because of where rates are, what the Fed is likely to do and say? Over the short term, I can certainly see where there'll be some pressure, Scott, but I certainly don't think they're dangerous. Companies that can engineer their own earnings, that can grow their top line in an environment we're not going to see significantly strong secular tailwinds from a growth perspective. For me, I have trouble seeing that as the most dangerous place to play. All right. You guys have a good weekend. That's Shannon and Alisa joining us there.

I'll talk to both of you soon. Up next, big warning shot from FedEx. We told you about that. The stock plunging today. The company sounding the alarm on the global economy. Our next guest, though, sees big opportunity in that fall. Capital Wealth's Kevin Simpson. He joins us when OT comes right back. Just had the worst day ever for FedEx, the stock finishing down a stunning near 22 percent. Our next guest, though, looking to use that weakness to add to FedEx rival UPS. Joining us now, Kevin Simpson, Capital Wealth Planning founder and CIO. I'm looking, Kev. It's good to see you again. UPS today was down about 5% in sympathy. Why is this an opportunity rather than a warning? Yeah, well, sometimes that happens when you see

competitors go down in sympathy. And oftentimes that's been an incredibly opportunistic buying opportunity. You probably didn't see this, Scott, but about two hours ago, the Financial Times came out with a piece on it. And they were saying that the $300 million shortfall in ground revenue may not have just evaporated, but may have actually gone to UPS. So I think there's a lot of opportunities here when you see a stock down in sympathy. We haven't owned FedEx probably for five years. Now, we were very lucky with UPS. We had a covered call on it and we had the stock called away about two weeks ago. So we've been buying back into it on the weakness.

Admittedly, in a vacuum, it would have been awesome if we could have bought it all back today. But sometimes we don't get that kind of crystal ball. But all in all, it's been a great trade for us. And I think UPS is two to three years ahead of FedEx in terms of the way they're looking at post-COVID margins. It's almost like FedEx didn't think that the COVID would change, the environment would ever go back to normal, kind of like a Peloton or a Teladoc. And it's funny because of a billion dollars that they invest in information

systems, you'd think that maybe they'd have a better read of the room, a little bit better lay of the land. And fortunately, UPS has just been serendipitously looking at cost cutting for really the past year and a half. So from an investment perspective and an investment thesis, I would use this pullback in FedEx and the sympathy pullback in UPS to get in there and own a great stock, a great investment and one that isn't going to be, unfortunately, a turnaround story, which is what I think FedEx is becoming. I mean, you only do this. And by the way, I did see I did see the column. Nothing gets past us in overtime. Kevin revenue warning, just not all macro related. That's their headline. You only do this if you believe that this is more FedEx related than anything else just not all macro related. That's their headline. You only do this if you

believe that this is more FedEx related than anything else and not a macro story, because if it's macro and if it's a canary in the coal mine, you wouldn't want to buy UPS here. Yeah, that's the thing. I don't think it's a macro story. I think it's a UPS story. That doesn't mean we can't have a global recession. That doesn't mean we can't have a recession in the U.S. There's pullbacks here. But this stock was at 205, 206 and at 176. You can get in here and make an investment in it. And you know me, I don't buy everything all at one time anyway. You know, we're layering into it. We use pullbacks as an opportunity. But this is one not to miss, I think, for, again, an investor two, three years out. Our whole thesis, if you're an active manager like we are, is that we want to

own companies that generate free cash flow, distribute it to shareholders. I mean, that's our playbook. It's that simple. And UPS checks a lot of boxes. Let me ask you lastly, before I let you go, this move that you've made more recently back into Apple, it sure looked good at the beginning of the week when the stock was at 164 intraday. It was below 150 today. What's your what's your current view of Apple? Now, are you concerned that it's going to start heading in the in the other direction? Well, I'm not concerned at all. We talked last week about our reentry points being between 145 and 155 target. We got to 153 and a half. And you're right, it did look good. It shot right up.

But as stocks have a tendency to do, they don't always go straight up forever. We tried to sneak in there today. We had more buy orders in for UPS as well as for Apple. We thought with quadruple witching, maybe there'd be a sell off in the last hour. We might be able to sneak in there. That didn't happen, but we'll continue to be buyers of Apple at 145. We love it at 135. We'll keep buying it. But I'm not worried about, you know, a 20 percent sell off from here. This is a long term investment in a company that generates incredible cash flow. And as we did from May to August, we'll keep writing calls against it, generating incredible income. And it's a stock that we we've owned for 10 years off and on. And we intend to own for years to come.

All right. Good stuff. Enjoy the weekend. We'll see you in the days ahead. That's Kevin Simpson joining us in overtime. Still ahead, we're wrapping up a big week for stocks. Christina Partsanova standing by with our Friday Rapid Recap. Christina. And we've got some heavyweights. Apple, Microsoft really bringing down the Nasdaq this week. I'll break down the biggest movers and shakers this week, coming up right after this short break. Stay tuned.

We're back in overtime, wrapping up a big week for your money. Let's get to Christina Parts and Nevelos now with our rapid recap. Christina. Negative on the day, negative on the week. That's how we end things with all three indices. Take your pick. You can say investors bracing for rising rates, a slowdown warning from FedEx, a strong U.S. dollar, and the expiration of many futures and options today. All factors adding to the volume and volatility.

Speaking of the strong U.S. dollar, gold, which will bring up in a second, closed a lower 2.5% this week. Gold, keep in mind, is priced in USD and both tend to move in opposite directions. FedEx, you talked about it a lot, but FedEx adding to the earnings risk theme this week. Several other companies like Dow, Huntsman, Nucor, all with negative earnings pre-announcements. You can see, look on your screen, a sea of red just for this week alone.

And on the S&P 500, not one sector managed to end in the week or this week in positive territory. S&P and Nasdaq both posting their worst weeks since June. And on the equal weighted Nasdaq 100, Apple having the biggest point impact today, even as the latest iPhone hit stores and people lined up around the corner. But it's Microsoft falling 7.5% this week that really had the largest impact on the Nasdaq 100.

Scott. Christina, thank you very much. Have a good weekend. We'll see you next week. That's Christina Partsenevelos. Up next, making the case for the malls. One money manager thinks inflation could be a huge upside catalyst for a stock. We'll show you about, bringing the name in our two-minute drill. A reminder, it is not too late to sign up for CNBC's Delivering Alpha conference, all happening live and in person on September the 28th. You can register now, deliveringalpha.com.

We've got some great guests, as always, this year. Last call as well to weigh in on our Twitter question. We want to know what is the most attractive asset class right now, bonds, the dollar, stocks, or something else. You can head to at CNBC Overtime. Cast your vote. Time's running out. We're going to bring you the results, stocks, or something else. You can head to at CNBC Overtime. Cast your vote. Time's running out. We're going to bring you the results plus our two-minute drill next.

Two of the results of our Twitter question of the day. We asked the most attractive asset class right now. 45% of you said stocks. That was the winner over bonds, 22.5%. Let's do our two-minute drill now. Let's bring in Chuck Lieberman. He is the co-founder and CIO of Advisors Capital Management. It's good to see you.

Let's talk some stocks. We said you like a real estate play, and it's Simon Property Group. It's a REIT. Right. It's a REIT. They own eight quality malls, some of the best malls in the country. Very cheap stock, trading at around eight times next year's earnings, very strong dividend, which is well covered, 1.7 times coverage on the dividend. They've hiked their dividend for five

quarters in a row. They reduced the dividend back during the pandemic, and they've been restoring it. And there's more upside still to go on the dividend. So you have a play that benefits from inflation. What about Lincoln Financial? Why should I buy that one now? Hurt by the pandemic, hurt by COVID specifically, obviously more mortality. But as a life insurance company, they also benefit from rising interest rates. Cheap stock buying back about 6 percent of the company. They've been a major buyer of their own stock. And again, you get paid to wait. The dividend yield of about 4 percent, a little less

than 4 percent. Energy transfer is popular lately. In fact, it was picked yesterday in our two minute drill by another money manager. Why do you like E.T.? And you got 20 seconds. It's about 25 percent cheaper than its peers. A big fat dividend raising it. They've got a huge property, Lake Charles off of Louisiana. That's going to be an LNG export center. And last time I looked, Germany was short of LNG. All right. We'll leave it there. Chuck Lieberman, Germany was short of LNG. All right. We'll leave it there. Chuck Lieberman, thank you very much. Enjoy the weekend. We'll see you on the other side.

Oh, it's going to be a big week ahead. And what a rough week it's been for stocks. Dow was down 4%. The S&P near 5%. NASDAQ about 5.5%. Got that Fed meeting looming. Hope all of you have a great weekend. I'll see you on the other side.

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