Closing Bell - Closing Bell Overtime: Former FTX Investor On SBF’s Sentencing; Celsius CEO On Surging Growth 3/28/24

Episode Date: March 28, 2024

The S&P 500 closed up 10% this quarter, its best start to the year since 2019. We bring you your second-quarter playbook, including stealth AI opportunities with Citi’s Drew Pettit. Plus, a former FTX investor on what he makes of Sam Bankman-Fried’s sentencing today and what it means for crypto. Celsius CEO John Fieldly on the company’s incredible stock run and its latest plans for international expansion.Investment Committee Disclosures

Indeed, the Dow and S&P both closing at record highs as we wrap up the best quarter since 2019. That's the scorecard on Wall Street, but winners stay late. Welcome to Closing Bell Overtime. I'm John Fort with Morgan Brennan. Well, the S&P posting its 22nd record close of the quarter. It's not just stocks that are having a huge quarter either. Oil outperforming the S&P's gains. Bitcoin returning more than 60 percent. Coming up, Apollo Global Management's chief economist, Torsten Slocke, on what today's GDP report and tomorrow's highly anticipated inflation data could mean for the Fed's rate cut strategy. Plus, the CEO of energy drink maker Celsius, the stock has nearly tripled over the last year

on what's driving demand in this red hot industry. But now let's get straight to today's action and the quarter's action with our first guest, Rich Weiss of American Century Investments. Rich, how do we get here to these record levels for stocks in the first quarter? And what do you think it says about where we might go next? Well, you know, John, it's always hard when we hit new highs, a quarter like we just had, record quarterly growth in the S&P, to come on and be that guy, the cautious guy. I'd like to say the voice of reason. But in this momentum-driven market, it's basically a FOMO market at this point. Momentum as a stock driver

always worries some very fickle stock market driver, unlike valuations or growth or profitability. When investors are buying stocks simply because the stocks are going up. It's circular reasoning. It's like picking up nickels in front of the proverbial steamroller. So we definitely be a little cautious here. I'd love to come back on in three months. Let's talk after another quarter because I do not see us repeating this quarter as good as it's been. OK, well, I mean, I guess it's not saying too much to say we won't repeat this quarter, but could it still be good from here? I don't know. Well, I want to move on to what you're saying about fixed income. You favor the safe yields there before we even get to the appreciation that would arguably come if and when we get the rate cuts that many expect. Tell me more about that and how much you lean

into fixed income right now. Oh, only at the margin. You know, we're not market timers. We don't move in and out of the market wholesale. So we're tilting about five percent into fixed income assets, along with some other tactical positioning within the stock market, small cap and REITs. But in fixed income, generally staying higher credit quality, a little bit long on duration. To your point, you know, looking for the slowdown, that's probably the safe place to be. And with yields, you know, with a 4% handle or better, depending on how low you go in the credit quality, if you do the math there, you know, maybe a 2 percent drop in

rates if it were across the board. We're not envisioning that so quickly. Average duration around five, six years. You can get quite a hefty appreciation, something much more attractive than what we see in some of the large cap growth stocks right now. It's interesting to hear you talk about this because what was so unusual about this first quarter is the fact that you had this torrid rally in stocks, but you also had gold reaching record high. You had crypto and Bitcoin touching a record high. You had a big rally in crude and the energy commodity complex as well. The dollar restrengthened, particularly notably against the yen here in recent days and recent weeks. And yet treasury yields are higher on the quarter, too.

Is that a sustainable dynamic going forward? And how does it speak to to dig even more deeply into your investment thesis around fixed income? Right. We do not believe it's sustainable, not in the near term. Now, maybe by the end of the year, once we get through some of this market froth, right, or animal spirits, I think is a term I've been seeing lately. It's all part of this momentum trade that's been going on. Earnings, they're just not there. They're slowing down. and a few key names, many of the sectors of the S&P had negative or low single digit earnings recently. So we don't see the fundamentals driving it. And with rates staying high, at least for the foreseeable future, you'd have to be a professional contortionist to find something positive in those latest CPI reports. So with rates staying higher, we're not going to see PE expansion here. It feeds into our outlook, which is relatively cautious, again, for the next quarter or two.

OK, but if rates are staying higher because the economy is stronger and consumers are remaining at least a little bit more resilient than everybody had anticipated, isn't that actually a good thing potentially for earnings? Potentially, but rates are staying higher because inflation is staying higher and the Fed's afraid to pivot too early. I heard the governor's comments the other day. So it's not necessarily the economy is so strong. We see it as slowing down or decelerating with high inflation. That's not a great outlook for stocks.

OK, Rich Weiss, great to get your thoughts today. As we do see a record high for both the Dow and the S&P, the S&P finishing at 52.54. And for the quarter, this rally broadening out with every sector showing gains for the first quarter other than real estate and REITs. The stock market may be closed tomorrow, but Wall Street is still on alert as we do await results from the February PCE report that will be out tomorrow morning. Joining us now is Apollo Global Management's chief economist, Torsten Slock. Torsten, it's great to have you back on.

We got a lot of data today, including GDP, which for this final reading was strong and which did show that inflation remained sticky. But on the flip side, you had some Goldilocks numbers, too, particularly consumer sentiment, as we're seeing that at the highest level since July of 2021. And inflation expectations in that report hovering near their lowest level since December of 2020. What to make of the mixed messages we've been getting from all of these data points to date? Now, this is very important, Morgan. So I think that the key issue really here is that

when the Fed began to turn dovish in November, December last year, we can discuss exactly the date, whether this was the November 1st meeting or the FOMC member on December 13th. But the bottom line is the stock market has rallied 25% since November the 1st. So think about it, the market cap of the S&P 500 The stock market has rallied 25 percent since November the 1st.

So think about it. The market cap of the S&P 500 is about 45 trillion. So we added 25 percent of that is about 10 trillion. We added 10 trillion in wealth to consumers, to corporates, basically in a span of only about five months. How can this not be positive for consumer spending? How can this not be positive overall for capex spending? How can this not be positive for hiring? We are seeing a significant tailwind as a result of this easing in financial conditions. This is also why you're seeing credit spreads are tightening. That's been creating a rebound in IPO, in M&A activity. That's why we are now seeing a tailwind to inflation, tailwind to the economic data. So the conclusion is the data we got today from GDP was indeed strong because it's a reflection of the Fed that has now turned around and given a tailwind. And we've seen employment being strong for the last two months, inflation

being strong. So the conclusion is we should also expect to see earnings continue to be strong. So what does that where does that leave us in terms of the commentary we did get from Fed Governor Waller last night? Because he had been pretty hawkish and then he had been sort of the first one to really significantly tilt a little more dovish late last year. That's when you, to your point, started to see this market rally and then Powell basically piled on. The fact that he shifted slightly more hawkish in tone last night and markets had to digest that today ahead of that PCE number tomorrow. How notable is that? This is really important because he was one of the biggest hawks on the FOMC. And he then at a speech he gave in November really turned much more dovish, essentially saying inflation

is no longer as big a problem as we thought before. And that's true. And that is a correct description. The problem was that that unleashed some very significant powers in the form of an easing in financial conditions, and it unleashed the powers in such a way where he now, yesterday, basically had to step a little bit back and say, well, hold on, maybe this easing in financial conditions is indeed the source of why the inflation prints in January and February were so strong and why they did not find payrolls in January and February were so strong and why they did not find payrolls in January and February were so strong. And to your point about the data tomorrow, Morgan, exactly, we should expect to see still the PCE inflation headline at 2.5, core at 2.8. That is still not quite 2. And that conclusion, therefore, is if we now have a tailwind to consumption, if the economy starts to reaccelerate over the next several months, which would be

completely logical as a consequence of this significant increase in wealth for households. We should see the Fed, and we would expect the Fed to begin to worry more about the inflationary trends simply still not being solved yet, and therefore the inflation problem still being around. Okay, so Torsten, if you're right, you're saying the Fed won't cut rates at all this year. That would mean there's a reality check coming for a lot of investors, equity investors in Q2, since people are looking at, oh, you know, maybe June. All right. If that doesn't happen, what are the implications for stocks? Yeah. So this exactly is a discussion, John, namely why is it stocks are going up when rates are now higher for longer? Is it because of the AI story? And this is not only the tech sector now.

It has been broadening out exactly as you're pointing out. So maybe the market is now saying, well, there is this, call it exogenous, this external thing that's going on, namely AI, that is now not only going to be helpful for the tech stocks, but also going to be helpful for really almost all of the rest of the stocks in the S&P 500. If that's the narrative, then it doesn't really matter what the Fed is doing. It almost doesn't really matter what inflation is doing. The stock market wants to go up because of that narrative. So if that is the truly exogenous or external thing that is coming around and boosting the stock market, then we should be

looking at that and saying, OK, if the stock market wants to go up for those reasons, well, that means that the Fed simply needs to do more with raising rates because the rate hikes are now being neutralized by the significant easing in financial conditions that we're seeing literally every day, including today with an all-time high. Sets the bar high for PCE tomorrow. And then, of course, when markets reopen on Monday, how investors do digest this latest round of data. Torsten Slock, thank you. Always great to have you on. Thanks for having me. We'll have full coverage of tomorrow's key inflation data report tomorrow at 8.15 a.m. Eastern on CNBC.com. I will be there. So will Steve Leisman and Rick Santelli. We're

going to be bringing you all of that breaking news and analysis in real time because you are going to need to know what's going on with that report ahead of trading again on Monday morning. Just CNBC.com. No QR code needed this time. We've got plenty of those for later in the show. Oh, yeah, for sure. Just not yet. Right now, let's bring in Senior Markets Commentator Mike Santoli for his first dashboard. Mike. Yeah, John, so everyone hitting on this theme that the market has broadened out, become more inclusive, lots of non-tech, non-growth areas of the market performing.

It's pretty stark if you look here at the basic materials sector of the S&P. It's the XLB against software. So arguably the heaviest in terms of physical weight sector against pure digital. Obviously, if you go back farther, there's a lot of catch up for materials to do. What's interesting within basic materials is the parts that are working well, such as construction materials and aggregates. It's a massive commercial construction boom going on right now, but also chemicals and to a degree some of the industrial metals and paper stocks. So maybe that's a global growth story or just reflationary type activity here, but definitely bullish in the short term. Also, regional banks,

or at least some of the stronger regional banks, have started to get a better looking chart set up here. And they're now outperforming over six months the semiconductor index. And, of course, that semi index has largely been pulled higher by the AI plays, by NVIDIA, Broadcom and AMD. The actual equal weighted semi index has basically done nothing this year. It's almost equivalent to what utilities have done. So a little more selective market and one where there's leadership you can find in places other than the familiar areas, John. Yeah, and what does that maybe signal

when you've got materials and then energy did particularly well in Q1, Q2? I mean, it's a little defensive, right? I would argue it's more cyclically geared. So I wouldn't materials typically what you wouldn't call defensive. You definitely call them value. So they're cheaper. And I do think that if you wanted to draw a macro message out of this activity saying

don't worry too much about the industrial side of the economy falling apart very quickly. What does it mean in terms of inflation from here on out? It probably means the best part of the goods disinflation is already in the books, and we probably have to rely on other things to get toward 2% over the next several quarters. All right. Mike Santoli, see you again in just a bit.

Now, Citi's director of U.S. equity strategy says investors need to broaden their exposure to AI. Up next, he reveals his top stealth AI opportunities. Plus, FTX founder Sam Bankman-Fried sentenced to 25 years in prison for fraud today. Coming up, we will get reaction from the co-founder of Tribe Capital, which was an investor in FTX. We've got such a big show ahead. Stay with us. Overtime's back in two. Welcome back. Citi out with a new note saying it's time to buy into the next leg of the AI trade.

The firm points out plays for both growth and value investors to broaden their exposure. Joining us now to break it all down, Citi's director of U.S. equity strategy, Drew Pettit. Drew, welcome. You know, yellow flag for me here because there are a lot of companies, almost every company, talking about having an AI play, but many of them probably don't have real ones. So as you try to broaden out, how do you avoid getting tripped up in that truth? So from our seat, we're going to rely on our fundamental analysts here. I get the game some of the C-suites are playing right now. Let's see how many times I can say AI on an earnings call and see if I can get myself

a premium multiple. But what we have at Citi is this big toolkit where we have our fundamental analysts tag individual stocks to themes. So I'm just going to go and work under the assumption that these C-suites aren't pulling the wool over the eyes of our analysts. So number one, I think you need some subjectivity and you have to listen closely. And honestly, you need some human intervention to see who's a real user of AI. Is it being a user of AI? Is it companies that actually have the data to develop proprietary

models that will allow them to get the benefit from AI more quickly? So I think that's the obvious trade. Not to be too blunt here, but we see that in a lot of stock prices right now. We see NVIDIA ripping. We see Amazon ripping. Google had a really good 2023, struggling a touch in 2024. But really, we recognize those trades. Markets see that. Analysts see that near-term fundamentals. It's the next leg of who's not the obvious beneficiary that I don't think markets are quite there yet. So that's why we're saying get ahead of the next leg of the trade in AI, which is going to be broaden out and couple some of the users,

the industrial space that is going to use AI to make their businesses better with some of the obvious near term beneficiaries. OK, so let's name some names here, especially since you break this down as users recommended for growth investors and users recommended for value investors. Yeah, so a couple names I'll get into here. So on the value side, SSNC, so ticker S-N-N-C, say that five times fast. It's an interesting kind of fintech IT services play. We have them labeled as an enabler, actually, because they're packaging some software and reselling it to

companies that can use AI and automation to help their processes. But they too, if you listen to their C-suite, are talking about how they can integrate some of that technology. So for their next leg of growth, they don't need to go out and hire. It's going to create a better margin profile for this stock. And it's one of our one of the names that's not just listed in this note, but on our thematic 30 focus list as well. OK, what got my attention here is that there are a couple of names that appear on both of your lists and they're both industrial names. They're both specifically aerospace and defense, which I happen to know from all of my reporting have been early adopters of machine learning and AI capabilities and are certainly investing in and expanding on

those possibilities as well. So walk me through how you're thinking about Northrop Grumman, RTX, and some of these other industrial plays. So it's actually twofold on the user side. Number one, they're taking AI and technology and integrating it into products. So the way I think about this broadly in the industrial space is no one really sells a widget anymore. They sell a smart widget. And when you do that, you can increase selling prices and, again, give your end customer a little bit of a better product. So that's step one. So that helps in margins.

That helps improve your business profile, your fundamentals. And then number two, these are big manufacturing companies. There is a lot of complexity there. And I think what we don't give them credit for is, yes, they're always trying to make consistent improvement. And then when you're trying to use machine learning and AI technology in the background to help sort out supply and demand, you can find more efficiencies in your manufacturing process. So AI technology, integrating a lot of this helps on the top line, on the selling price, and on the bottom line, and then cost structure. And that's why we're really, really cyclical bulls on the top line, on the selling price, and on the bottom line and the cost structure. And that's why we're really, really cyclical bulls on the fundamental story for a lot of these types of industrials.

Okay. Drew Pettit of Citi, thanks for joining us. Thank you. Well, up next, former FTX investor Arjun Sethi weighs in on the sentencing of Sam Bankman-Fried. He also discusses his new AI investing platform. And before we head to break, here's that QR code I promised you. You can get the latest installment of my On the Other Hand newsletter. This week's debate, does Apple really have a monopoly

in the smartphone market? Scan that code on your screen to join the conversation. Consider the points. Over time, we'll be right back. Welcome back to Overtime. FTX founder Sam Bankman-Fried sentenced to 25 years in prison today over the fraud that led to the collapse of the cryptocurrency exchange. Our Kate Rooney is outside the courthouse in New York with the details. Kate?

Hey there, John. Yeah, that 25-year prison sentence caps off what U.S. prosecutors say was one of the biggest financial frauds in U.S. history. Less than two years ago, Sam Beckman-Fried was a crypto billionaire, and in many ways, he was the face of that industry. Today, he took the stand in a beige prison jumpsuit, pleading for the judge's leniency with a much more contrite and apologetic tone than some of the defiance we heard from him when he was cross-examined in the fall during his criminal trial. He said his actions, quote, haunt him every day and said, I'm sorry. The judge today, though, ordering Bankman-Fried to forfeit $11 billion, saying he had never, in his words, seen a performance like Bankman-Fried's trial testimony, saying that

if SBF, as he's also known, wasn't outright lying, he was evasive. He admonished the 32-year-old and pointed to the enormous harm he did, the brazenness of his actions, his exceptional flexibility, as he's put it, with the truth, and his apparent lack of any real remorse. Also said that he committed perjury on the stand, which played into the sentence here. Bankman-Fried was found guilty in November on seven counts of fraud and conspiracy. His family today saying, we are heartbrokenbroken, will continue to fight for our son. His defense team does plan to appeal, guys. Back over to you. All right. Kate Rooney, thanks for bringing us the latest on that. Well, let's talk more about this with former investor in FTX and FTX US.

Joining us now is Tribe Capital co-founder and CIO Arjun Sethi. So much to talk to you about. It's so good to have you on the show. Welcome. Thanks for having me. All right. So I do want to start here, but we have a lot to get to, as I mentioned. And so I think back to having a conversation with you in November of 2022 as FTX was filing for bankruptcy. Just want to get your thoughts on this sentencing today and what it means in terms of closing a chapter for the cryptocurrency industry, which you have invested in over the years as we've not only gone through this, but we've gone through the regulatory framework. We've gone through Bitcoin ETFs getting approved. We've gone through a crypto winter and out the other end of it. I guess just

mark this moment for me and what it means for this industry. Yeah, I think if you take a step back on crypto and what it means for the industry is that you've had a difference between centralized exchanges, centralized finance, and decentralized finance and exchanges and what's been happening there. And I think this is like a blip in the radar of what you see for FTX. There was a bunch of other companies that had sort of been bad actors. I think the definition of bad actors can happen across any industry. And what you've seen with cryptos has become more resilient. It's changed pace at a faster and faster momentum for the investors that are retail, institutional, not just here in the United States, but all over the world.

So I think it's good that we're able to close this chapter, move forward. But, you know, the industry has just continued to become stronger and stronger through this momentum. OK. In the meantime, since the last time you and I spoke, you started a new company, Termina, which has been spun out of Tribe. Walk me through walk me through this business model, subscription-based AI software platform for, quote, quantitative diligence. What does that mean and why take what sounds like proprietary technology and capability and offer it to others? Yeah, so I think one of the things that's really important to sort of take note of is what's happening with AI, generative AI, et cetera, and what's a commodity and what's not. So if you take a step back, where is data coming from? How do you use it? is what's happening with AI, generative AI, et cetera, and what's a commodity and what's not. So if you take a step back, where is data coming from?

How do you use it? That's essentially how we've always structured our firm. And our firm is incubated, built, and invested in multiple companies in the ecosystem that have been proprietary data of deployment, foundational models, as well as the storage of the capabilities. And so one of the things that we've done over time is said, okay, there's a process that we know that works very, very well, but the data is proprietary.

And our data is one of the largest proprietary data sets of private companies, not just in the United States, but worldwide. And it's across crypto, it's across public markets, and it's across private markets. And so Termina has been essentially a culmination of not just my life's work, but my team's. And now we're able to leverage that data and make people more successful. Arjun, do you think we're going to get a moment of AI disillusionment? We seem to have gotten very quickly from excitement to hype. And even the web, the dot-com cycle went through this trough of

disillusionment when Amazon was cheap and people were saying everything was overdone before the real business set in. You think that's going to happen with AI? Look, during the late 90s, people would write the dot-com into their disclosures. They'd put it into their website if they had a website, but they would call themselves a.com company. And so you had an abundance of capital coming into that market for any company. And so people would lose money. You'd have someone come up with a napkin idea and then go public. I think the difference today is kind of twofold. One is a lot of these companies have real revenue. They're scaling at a fast pace. You're seeing a lot of traditional industries adopt software, machine

learning, AI, AGI, all in one. So costs become more efficient, your people are more efficient, you're able to do more with less folks around the table, and you're able to sort of deliver these massive customer experiences at the speed that we haven't seen before. So Klarna, you know, a company that's planning to go public at some point had disclosed that, you know, they had done a significant 80% reduction in costs in their customer service. When you think about all of these aspects of what you can to augment or save costs, it's going to be a big deal. So the second piece, sorry. Go ahead. The second piece that I think people kind of miss is that the area that's highly commoditized right now is everything that you can see on the web, right,

that you can search. So the chat GPTs of the world, the anthropics of the world, the next war that's being fought is synthetic data and private data. Where do you get that private data? What do you do with it? So all of the companies in healthcare, fintech, et cetera, enterprise infrastructure that's been around for a long time, they have a large amount of data that's accumulative to them and they can accrue that value. The question is, can they actually use that? And so a lot of people are fighting to be able to get there as quickly as possible. So there's this interesting supply and demand dichotomy between companies that are focused on chipsets like AMD, et cetera, where are they going to commoditize the ecosystem or are they going to be value cool

in the long term okay so since you wear two different hats i'm gonna ask you a two-part question here and that is what does that mean then in terms of investing in this next leg in this next stage of ai and also what does it mean in terms of the traction you expect to get and the growth you expect to achieve at Termina as well? Yeah, so two hats. So on the Termina side, our whole goal is to help the Fortune 500, the private equity funds, the venture funds, mostly mid to late stage. All these public companies have a better assessment of what to assess in their own company, the data that they already have there that's unnormalized and normalized and so i won't go too technical but it helps you essentially assess how to um how to how to deploy human capital as well as to execute at a higher efficiency on the other side if you're an investor looking into the ecosystem where is value

accrual going to be so when you think about the ai stack we use the words observability deployment data compute and foundation today everyone's talking about compute and foundation. So on the compute side, you're looking at NVIDIA, et cetera. On the foundation side, you're looking at OpenAI, Anthropic, Google, everyone's fighting that war. But a lot of what you've seen across the internet stack, the web stack, the data stack, is observability, deployment, and data is going to be where the new war is going to be fought. And our bet is data is going to be the key. Okay. Arjun Sethi of Tribe Capital and Termina, thanks for joining us. Thank you.

Well, it's time now for a CNBC News Update with Kate Rogers. Hi, Kate. Hi, Morgan. House Speaker Mike Johnson notified the Senate today that he will send DHS Secretary Alejandro Mayorkas' articles of impeachment to them on April 10th. The House narrowly impeached Mayorkas in February for his handling of the U.S.-Mexico border through the Democratic-led Senate is expected to acquit him. A group of Republican-led states sued the White House today to block a new student loan repayment plan from the Biden administration.

Eleven states argue the president overstepped his authority in creating the plan, which they argued was the same as Biden's plan that the Supreme Court struck down last year. And as Team USA looks for its eighth straight Olympic gold in women's basketball this summer, nine former Olympians, including Brittany Greiner, along with NCAA superstar Kaitlyn Clark, were among the 14 players invited to attend

a training camp next week in Ohio. Greiner was freed from a Russian prison in a high-profile prisoner swap in 2022, while Clark is expected to be the top pick in the WNBA draft next month. Back over to you. All right, Kate, thanks. And I'll talk about a stock jolt. Shares of energy drink maker Celsius nearly tripling over the past year. And up next, the company CEO is going to join us on what's driving demand, his strategy for competing in this fast growing market. And check out shares also of Estee Lauder, the big winner in the S&P 500 today after Bank of America upgraded the stock to buy. The analysts, they are calling the stock aerella story because of improving profitability and the launch

of new products over time we'll be right back Welcome back to Overtime. Shares of Celsius are up 178 percent over one year, and the company just announced it's continuing to grow its global reach by expanding to Australia and New Zealand. Joining us exclusively to discuss is John Fieldley, the CEO of Celsius Holdings. John, it's great to have you on the show. Welcome. It's pretty incredible. When I look at Celsius's 2023 revenue, it was a record year for you. Revenue sales grew 102 percent year on year. So you've set the bar very high for yourselves. Can you continue to hurdle it? How important is international expansion to that ability to do so? Yeah, no. Last year was a great year. $1.3 billion in sales. You know, you talk about trends. Celsius is capitalizing on today's

health and wellness trends. Fitness, we talk about our drivers. Fitness, the international expansion is a great growth driver for us. We just announced the expansion into Australia, New Zealand earlier this month. We've talked about and announced an expansion opportunity. We're going to expand in the UK and Ireland as well. So the same health and wellness trends we're seeing in the US, we're seeing them globally. And then we also just announced further expanding our partnership with PepsiCo in North America with an incentive program,

which further aligns our interests and will allow us to capitalize further on the great opportunities we're seeing in trends today in 2024. And then also another growth driver we have is resets are coming up, which typically happen when retailers in March, April, May, and we're anticipating the biggest really reset season that the company has seen. Just due to the great growth and trajectory, the company is on. And those health and wellness trends continue to get stronger each day. And Celsius is capitalizing on it with a refreshing, great-tasting energy drink and offering. Just really exciting times. Okay.

I want to go back to this amended agreement with Pepsi because you've had that in place for over a year. The filing came out yesterday. Investors sold your stock. Your stock's down almost 9 percent over the past week, despite the big gains we've seen since the start of the year and over the last 12 months. Walk me through this amended deal and what perhaps is getting missed by the market here since you are talking about it as a next growth lever. Yeah, I think, when we look at it it's really an incentive program we put together to further align our interest. You know and also

allows us to be a further prioritization within the great PepsiCo portfolio. And then what's interesting when you look at Celsius we're really going after not only the energy drink opportunity which we see but also total beverage. We just

expanded into Jersey Mike's. We see a lot of opportunity on usage occasions outside of traditional energy. And when you look at it, the big transition, when you look at increasing your consumption levels, bringing more consumers in, is it's activating at the point of purchase. So it's really important that we really support these resets coming in, get secondary placements, take advantage of cold availability. And this incentive and program really aligns our interests with Pepsi's interests, and we both win further on success. John, talk to me about the marketing strategy longer term, because we used to talk about 50 Cent and vitamin water. We don't talk about that so much anymore. FloRida sued you guys a year plus ago and then came out with his own energy drink. Granted, he's not nearly as big as you guys, but what keeps you sticky and growing marketing strategy-wise versus a flash in the pan?

Yeah, no, that's a great question. And, you know, a lot of brands have come and gone. There's no question about it. You know, it's very difficult to get one share in the energy category. We're now over a 10 share and growing. And this is before the even the resets take place that we're anticipating. You know, brand building brands is very difficult. What's fascinating about Celsius, the brand's been around for over a decade. We built this brand in the fitness channel, really with loyal consumers. We have great tasting flavors, the most refreshing flavors in the category feel. I'm drinking an orange right now. Great usage occasion in the morning or before a workout. We're seeing consumption during lunch

and during snack time, afternoon pickup. We just launched Arctic Vibe and Tropical Vibe. We've got great, unique flavors. But, I mean, are you celebrity-led? Do you have to spend more on big events? What's going to really drive that differentiation to separate you now that you have this awareness and this capital? Yeah, you know, we're very well capitalized. We're expanding with our gain increased distribution.

We just partnered with Ferrari with F1. So that's a great global partnership. We also partner with MLS, Major League Soccer. The Inter-Miami just won the Cup. So really exciting, gaining more awareness. It's all about going after additional consumers as well. We have a essential vibes tour that's going coast to coast with bringing music to life with experiential marketing.

We continue to invest in the brand as well. So we got great marketing tactics, great new flavor innovation coming. We just launched a blue raspberry lemonade at 7-Eleven, which is really phenomenal. We got great flavors and we're going to continue to bring the energy and bring that essential energy, and everyone's looking to live fit. All right. John Fieldley, thank you from Celsius. Thank you. Up next, Mike Santoli looks at whether the return of retail options traders

is a bullish sign or a warning sign for Wall Street. And Reddit, under pressure after some of the social media companies' top executives, including its CEO, revealed they sold hundreds of thousands of shares following last week's IPO. Stay with us. Welcome back to Overtime. Well, today we had record-closing highs on the S&P and the Dow. 52-week high for Dow component JP Morgan. And for the quarter, it was the best quarter since 2019. 22 closing highs, as we mentioned, on the S&P.

It sets a high bar, Morgan, for Q2. It really does. It's interesting. Bespoke actually put it out today that when you have a strong start to the year like this, it tends to be good for April, which in general historically tends to be a strong month of the year for stocks. So we'll have to see how it plays out. Let's get back over to Mike Santoli with a look at the comeback of retail options and retail options traders in this market. Mike. Yeah, exactly.

Morgan, now, look, in general, investors are feeling pretty good about how the markets have done. And the chase is somewhat on among smaller investors using options to engage with stocks. So here you have, according to J.P. Morgan, the percentage of total options trading volume that is coming from smaller retail traders. It's back near the highs that we saw back in early 2021, if you remember, that was when a lot of things peaked. Unprofitable tech, ARK Invest, SPACs, all of that kind of pandemic era speculative stuff peaked at that point. And then it kind of waned from there. Obviously, we had a little bit of that downturn in 2022. So this in itself doesn't mean the market is getting overall too frothy. But it does sort of change the energy level in the markets. A lot of short-term

operators are trying to maneuver for the next few points. We know we have options that mature every single day. And so that creates a little bit more of a kind of a binary fantasy sports type aspect to it. Now, take a look at some of the companies leveraged to this type of activity in this customer base. Robinhood, Coinbase, huge years up more than 40 percent. That's just year to date. Now, they're coming off a very low basis. But this is more like the buy and hold. Crowd, T. Rowe Price, BlackRock doing fine, but not doing as much right here. So it's, you know, in part Morgan, a bull market acting like a bull market. OK, bull market acting like a bull market. I just wonder why we're seeing such

a resurgence of retail traders and options activity in this market. Is it just because it's a bull market or is it reflective of something bigger, like the fact that you've had this dramatic reversal in terms of financial conditions, which Torsen Slok was talking about earlier this hour? It's all of it. You know, I think in general, risk appetites mean people see more upside than downside. Now, I should also mention that selling of options has become a huge thing, too. And so just sort of saying, I'm going to use it for income. I'm going to hope that option expires worthless. And you're effectively betting that the market stays at this low volatility grind. That's going on right now,

too. The other piece of it is I think there's a generation of investors. That's just now their first step is the way they engage with stocks is to buy options, lower costs. They were kind of educated through the pandemic. They kind of don't mind the fact that you can more or less lose it all if your risk is limited to the cost. So I think that's another piece of this activity. Maybe we should stop calling retail traders dumb money. Mike Santoli. You can't characterize them exactly that one way or the other. All right. Mike Santoli, have a good holiday weekend.

Thank you. A successful frontier tech investor is setting his sights on a new frontier. That's next. And shares of Palantir falling after Monash Crespi downgraded the stock to sell from neutral sighting valuation. That stock, like Celsius, nearly tripling over the last year, even though they do very different things. We'll be right back. Well, Justice Parmar started Fortuna Investments in 2015, making early bets on lithium that paid off big.

Now his VC firm is setting sights on a new frontier market. We did extremely well in the battery technology space, and we've now turned our attention to the new space economy. We think this new space economy is nothing like we've ever seen before. We think it's a $500 billion industry going to a trillion dollars, and it's an amazing time to be alive. So Fortuna recently became an investor in SpaceX. It has already backed a startup called Starfighter Space, which is a launch provider touting a fleet of F-104 supersonic aircraft. Fortuna's plan, though, invest in roughly a dozen early-stage space companies and hope to realize returns in three to five years. What we've seen is in 2024, the valuations of most earlier-stage space companies

are at all-time lows or pretty close to all-time lows. So you have the valuations actually at a very low depressed price, yet you're now seeing the technology being the furthest it's ever been. So that's an amazing setup for folks like us and new capital to really get involved in an industry like this. And you're seeing that play out both in private and public markets. Parmar notes that the top end of the market is starting to make meaningful headway, be it Elon Musk and SpaceX or Jeff Bezos and Blue Origin as that company prepares to this year launch its long-awaited orbital rocket New Glenn. And he sees these milestones as signs that the

market is materializing in a more meaningful way and will trickle down. So you can check out the entire discussion with Fortuna CEO Justice Parmar on Manifest Space. Just scan that QR code on your screen or check out the Manifest Space podcast, wherever you get your podcasts. All right. Well, the March employment report is the big item on Wall Street's radar for next week. But there's a ton of other economic data and earnings you need to know about. That is next. And as Morgan just mentioned, you can catch us on the go by following the Closing Belt Overtime podcast as well on your favorite podcast app. We will be right back. Welcome back to Overtime. Investors will get a read on how many consumers are putting on their jeans and going out for a good time when PBH, Dave & Buster's, and Levi Strauss report earnings next week. Plus more details on food inflation when we get results from CalMain and ConAgra.

And then there's a slew of economic data to digest. Monday brings the ISM manufacturing report. Tuesday brings monthly auto sales and the job openings and labor turnover survey jolts. We'll see if the quit rate has changed. On Wednesday, we'll get the ISM services data. Thursday's weekly jobless claims. And it all leads up to the March jobs report on Friday, Morgan. And of course, even though markets are closed tomorrow, investors are awaiting that key PCE inflation data. It's the Fed's preferred gauge for reading inflation and where we're at in the economy. Everyone's watching that closely. Steve Leisman, Rick Santelli, and I will be bringing you

that breaking news and analysis on CNBC.com. That kicks off at 8.15 a.m. Eastern tomorrow morning. And John, right now, streets looking for a 0.3% month-over-month increase in February. That would keep the rate of growth in inflation unchanged to 2.8%. But we have seen both PPI and the last two CPI reports come in hotter than expected. So the key question, especially ahead of a long holiday weekend, is going to be how much is priced into this market when we start trading on April 1st?

Well, we'll look for you in the morning to let us know. All right. Have a wonderful holiday weekend. It's going to be how much is priced into this market when we start trading on April 1st. Well, we'll look for you in the morning to let us know. All right. Have a wonderful holiday weekend. That does it for us here at Overtime. Fast money starts now.