Closing Bell - Closing Bell Overtime: Is the bear market over? 3/25/22

Episode Date: March 25, 2022

S&P 500 and Nasdaq close higher for the second-straight week. Can the rally keep going? Jim Cramer says the “bear market is over.” Halftime Report traders traders Jim Lebenthal and Steve Weiss debate Cleveland-Cliffs in tonight’s “Friday Night Fight.” Plus, is tech the biggest risk or biggest reward for your portfolio? Dan Suzuki from Richard Bernstein Advisors and Dan Ives from Wedbush Securities discuss. And, Michael Santoli is watching for “accidents” in the market.

Pretty impressive move, Sarah. Thanks so much. Welcome to Overtime. I'm Scott Wapney. You just heard the bells. We right here are just getting started. Mad Money's Jim Cramer will be here in just a moment to tell you whether this rally can keep going. We begin with our talk of the tape, whether it is in fact time to get a lot more positive on stocks, given the burst back from the lows. We begin our conversation today with BMO's Brian Belsky. Welcome back, Brian, to Overtime. It's good to see you today. Thanks so much for having us, Scott. What a way we've come back. And you look at the gains from the low.

The Dow's up 7.5% off the low. The S&P's 10% higher. The Nasdaq 12.5%. I can certainly understand why you would want to feel more bullish on the market. But should we? Yeah, I think we should, at least on near term. The diversification and the participation across the board, something that Santoli was talking about, I think is very strong and very resilient. You know, we do have some fears, though, on a short term basis that the market itself is a bit laissez faire on what's happening in Europe. I think we could see a surprise that shocked the market to the downside. But that that being

said Scott. You know the market is focusing on what the market should should be focusing on and that's interest rates. In inflation in the Fed what did a wonderful job I think last week kind of ushering in. The new phase of what's happening and

we have the information in the markets acting appropriately. And I think that's why markets have gone up and lastly I'd say I think a think a lot of people are confused on why tech has done so well. We have not been. I mean, number one, tech was pretty oversold. And number two, the facts are what the facts are. Five out of the last seven interest rate increases in terms of interest rate cycles, tech has outperformed.

And so I think the sector had been beaten up maybe a little bit too much, Scott. And now we've seen some bonafide come in. So I think the resiliency of the U.S. market is on clear display right now. All right. My man Kramer is with us as well. Jim, welcome to Overtime. It's great to welcome you to the conversation, too. My question to you is, in fact, are we too laissez faire about what's happening with Russia? Are we too laissez faire about what's happening with interest rates? I see a two-year today at 230. I see a 10-year at 250. Those are big moves. But maybe they are signs of what the reason why we had a bear market for so long. I think that I'm featuring a company tonight from Uruguay

and the stock's down, I don't know, 60% from its top. And last night I had some that were down 60%. I've had more companies that are down 60%, 70%. And, Scott, yes, we had that big move up in rates. But Brian's got the last thing he said is true. I mean, you know, this one holds in. This market holds in because it's been so crushed. It's been pancaked.

I mean, even when you look at the great ones, you look at NVIDIA. I mean, NVIDIA was down gigantically from the top. So you can say, well, hold it's up big from where it came from a long time ago. But it's been a horrendous bear market. And we just refuse to acknowledge that it's been a horrendous bear market, Scott, which is why I think it was maybe it was late last week that the retracement that we've seen now better than 50 percent from the low is a sign historically that it might be all clear. Do you still feel that way? OK, this is from Larry Williams is a great market story. I'm sure Brian knows there have been 21 times since 1929.

So we're going back there where we had a 50% retracement from the low. And in all 21 times, we were up substantially, not that long after. So you're dealing with a historical record which says basically that the bear market that we lived through, and it was a bear market since November, has ended. And obviously, something happens in Ukraine this weekend. You know that that's obviously I'm not going to dismiss that. But I am saying that the action this week and Brian, correct me if you're thinking wrong, but the rotational action was all positive

this week. People are afraid, Brian. They're afraid of missing a move in the foods, in the banks, in the fertilizers, in the plastics, in the semis, in the industrials. They're afraid of missing these. And that's completely stood on its head from where it was since November. What do you make of it, Bri? Yeah, we would agree with that. And, you know, if we had to talk to 100 clients a day,

99 and a half of them are trying to position accordingly the way that Jim is talking about. So using good old-fashioned stock picking fundamentals. And to me, being a bull on this market for a long time. Remember, Scott, two years ago this week, it was the market bottom. And we had the great fortune of being on your show that night, your special market report on March 23rd, and said that the market was going to rally 50% from the lows. And it did, following through with some of the logic that Jim talked about in terms of the retracement.

But I think the biggest thing that people are missing is we believe that global investors are coming back to the United States and Canada for that matter because of the earning stability that you're going to be paying for in the U.S., especially relative to growing geopolitical volatility, not only in Europe, but clearly in emerging markets as well. So we think investors are coming back to North America. Wow. So I hear you both. And I say, I wonder if we're still ignoring some of the risks. The kind of risks that Jeremy Siegel of the Wharton School talked about with me here in overtime the other day

as a reason why he thinks we're not all clear and we could still go back to the lows. Let's listen to the professor. We can kick it on the other side. I wouldn't be surprised if we tested those January and February lows because I still think there's going to be some hawkish surprises. Two weeks from today, we get the Fed minutes. I think they're going to reflect a very hawkish tone. And then we're going to have that consumer price report on April 12th. And unless that's much better than expected,

I have to tell you, I think it's going to be 50 basis points in the May meeting. Yeah. Your friend from Philly, do you agree with him or not? I want 50 basis points. I want a tough Fed. I want stability. I want the rates higher. I want the fact of recognition from the Fed that things are too hot. I want housing to come down. I want KB homes to have stock going down because there is not enough demand. If mortgage rates go up, I want everything to cool off. The one that I worry about the most is the fact that 13 percent of the calories are being taken out with Ukraine, Russia, and the soy harvest is going to be bad in Brazil. And therefore, there will be famine. And famine does produce terrible political results, not just humanitarian.

So that's I'm worried about the price of food. I think the others are going to start going Jay's way. Not yet. But when I hear Professor Siegel say, I'm worried about this. Well, you know what? I'm not. Everybody else must be worried. Everybody's worried about the same things. I keep thinking I am worried that how did I miss the Microsoft from 280 to 300? How did I miss the 70 points in NVIDIA? What was I thinking?

That's what I'm worried about. Because maybe, Jim, you make the case and you can make the case that everything the professor said is known. That's it. It's all in the market. That's it. That's why. Jay Powell has messaged. He's told you. That's why. He's told you what's coming.

Have you? There are 600 companies that came public in the last 18 months. I mean, there's like seven on the trade north of nine bucks. I mean, this is the bear market, just like 2001, except for we have rates much lower. And Brian, you remember those days. I mean, those companies were all jokes. A lot of the companies, I'm looking at all the companies that are under 10. Many of them are actually making money.

We are in some weird market that it's a bear market and no one called it as a bear. And I think the bear market is over. Wow. And that's a big call. Brian Belskyky react to that well the bear market has been over for a while when you have over 70 percent of the stocks in the s&p 500 down more than 10 percent you have 50 down more than 50 percent i'm sorry 10 percent uh but i think that the key thing that is different between 2001 is remember was we were by the dip craze big time and we were still so focused on. One area that being technology I think

the market actually done a really good job. Diversifying not itself but remember to the the interest rates scenario goes up because the economy is improving. And that should be very very good remember stocks lean earning which leads the

economy. It's already in the market we already know this stuff in this incessant need for everybody to know everything all the time. Scott, the Fed did a wonderful job last week kind of mapping this out. So we know the chart path. Now let's invest accordingly. And that's why the market's going up. But we should have been down big today.

We should have been down big. Right. I mean, nothing's going our way. We got to worry about what's going to happen in Ukraine this weekend. President comes back. We can't get there. There's no fuel there. We're, like, trying to move natural gas, and we can't move natural gas. Every single one of the grain complexes. And the market went higher. I mean, today was a really discouraging day if you were a bear. I mean, you really thought you had it going for you.

I mean, you came in, and you just said, man, this is like Yellowstone National Park. Today's my day. And, Scott, it didn't pan out for you. It did for a while. And then there was a nice burst right to to us here in O.T. But let me throw this out there. You know, if for three quarters it was bad, but the fourth quarter is good. Do we asterisk the win? Do you say it's a W, but we put asterisk? No, but let me ask you this, because you say we know a lot and we do. But one thing we don't know, one thing the Fed doesn't know, what are earnings going to be, Jim?

And in a couple of weeks time here in overtime, one after the other, after the other, every day, you're going to get those reports. And that's going to be the tell as to whether this rally back is deserved and whether it can keep going or whether the professor is going to be right because we've gotten ahead of ourselves. Do you have a problem with a market that's led by banks, that's led by health care because we have a tough Fed, that's led by industrial? What the hell is Honeywell doing up today? Why is Honeywell up for the 10th straight day? There's nothing good at Honeywell, right? I mean, they missed the quarter. I mean, we have these stocks that are going up, up, up. And I think they're telling us you know what? Things aren't as bad as you think. Look at Nike.

OK, wasn't Nike supposed to be horrible? I mean, I think Nike at 133 is a great buy. They had a great quarter. I'm saying so far, look at that. They had a nice win. At one point, it was down to that. I'm just saying that we are seeing a lot of good action from good companies in all different areas, not just one. The buy the dip guys are gone.

They got obliterated. They're no more. I think that's terrific. Sayonara. They're all huddled in one stock, GME. Good. Let them have that. Let them eat bread in GME.

But I just think that there's just a lot of good things happening. And this rotation is a good rotation, not a bad rotation. Brian Belsky, part of your themes that you like are stocks like Lockheed Martin, Palo Alto, sort of a barbell approach with one on each side of the bar. Yeah, we just wrote a very lengthy thematic piece on industrials, and there's three parts to the theme, right? Defense spending, onshoring, and infrastructure in terms of CapEx. And on the defense spending, let's be clear, the world has changed,

and we think that defense on both sides, to answer Jim's question, that's why Honeywell's up, and that's why Boeing's up, and that's why Lockheed and Northrop are up, but also the cybersecurity is going to be a very big theme. We think this is a theme for the next three to five years, and we know the president wants to do infrastructure. We know that we want to dig for oil, and that's why you want to own Brookfield infrastructure and Caterpillar and Deere. But then we also think this long-tailed trade of onshoring is going to be here. So that's why you've got to own the rails. You've got to own industrial

REITs. And I think that's where you want to be. Spot on. Look at the Union Pacific. I mean, Union Pacific did not have a great quarter. I mean, this thing, you can't, this thing refuses to be derailed. I mean, never. I mean, it's unbelievable. Did you see the close? I mean, you know, Brian, here we go. You ready? All aboard! There you go. We're getting started on Mad Money a little early. That's okay, too. Because we're excited about that coming up at six.

Let me ask you this, Jim, before I move on. You are the father of the FANG. OK, yes, you coined it. And now there's a new acronym out there. It's called Mango. And I'm told it's your favorite. It's Marvell. It's Apple or could be Bank of America, Apple, Nvidia, Global Foundries and OnSemi.

Tell me why you like this group so much. Well, I would have actually the only one I wouldn't have. Global is going to have a good quarter next quarter, but that's cyclical. But those are all in secular growth mode. They're doing amazingly well. They've really annihilated their competition, including, by the way, Intel. I think Pat Gelsinger, he's on a mission of which I don't really understand. And I do think that these companies are the world's throwers. Look at Marvell. That's a $70 billion company. I think it'll be $100 billion there. What are they? They're in 5G, high-performance computing, and auto. I mean, what could you want to be more in?

If anyone watched Jensen Wong's keynote earlier this week, they would have said, you know what? I shouldn't be on the same, I shouldn't share the planet with this man. This person should be king of the planet. That's how brilliant what he wants to do is. On Semi, they're the only ones that have any chips of any availability for autos. Global can make the chips. I mean, I thought that Mango was good, which is why I ordered. I'm looking at my guys. How many Mangos did I order? We're doing a Mango Amid on Monday's show. Literally, we're ordering mangoes.

We're going to do a mango amid, and we're going to, like, you know, bow down to mango. And all I wish is that I had come up with it myself. I was too busy thinking about Tesla and Tango. I'm going to ask you about NVIDIA. Obviously, you love the stock. Jensen Wong is on the wall of fame forever. And then Mount Rushmore. However, however,

should that stock be up 33% in 17 days? The orders they're getting, first of all, it was down. It was just pushed down and people were worried about what he did with Arm. Arm wasn't right. I think that the move is, yes, it was up 28 points,

but the orders that they have for the things that they're talking about, they're omniverse is what's going to make it so that you actually will want to own meta platforms. They're digital twins are why you want to own the new industrial America. And he's got things that we haven't seen yet. He's got a new thing out today, a 2D picture that turns into a 3D picture in seconds. I'm holding this up. This is my dog is able to get into NVIDIA.

This actually does admit my dog. I can't get in. But you tell me what kind of executive you have who lets your dog. This is a dog lover. For all you 53% of the people in the country who have dogs, look at this. My dog is allowed in to NVIDIA headquarters. That's a sign. You did name your dog after the company.

It's the least that they could do. Well, they both had good years. Yeah. Let me do this. Let me do this. Let me do this. Well, the dog, I mean, yes, NVIDIA maybe had a better year. Let me ask you this. Before I let you go, before I let you go, our Twitter question, which we're asking everybody today, and we want you to vote as well.

What is the best safety trade in the market right now? Is it Apple, bonds, gold, or something else? Head to at CNBC overtime to weigh in. We're going to give you the results at the end of the show. But Brian Belsky, what do you think it is? Apple. We own it in five different portfolios we run. We run nine altogether.

We just think it is an exquisite company with a great balance sheet and very steady earnings. And it kind of speaks to everything that we talk about in terms of the theme and why you should come back and buy U.S. stocks. Jim Cramer. For the last 10 quarters, I begged Tim Cook and Luke, I should do a subscription model so that we can figure out what the lifetime value of someone who buys one of the billion people has an Apple phone. They've said no. They said that they put up the same fight that they did with me. But I wanted to service revenue stream broke up and then they finally capitulated. They're going to capitulate me now. We're going to know how much someone who buys an iPhone is worth to the company. And we're just going to suddenly have a revenue stream for the greatest technology company ever lived.

Brian Belsky, your genius. I buy Apple, too. Most important stock in the market right now. Is that it? You can easily make the case, Jim, that it is, given where it was at $150 on the day we started on March 14th and where it is today. And we might be talking next week about this stock back at a new high. Well, I did say when I did my morning meeting this morning with Jeff Marks for the investing club that Apple's the key to this market. So I can't be so mercurial as to say at 416 that I disagree with myself from 1020.

I mean, makes sense to me. Jim, we'll see you at six. Not too long from now. Brian Belsky, our thanks to you for coming back in overtime. We'll see you again soon. Jim, tonight, there he is, the CEO of D Local. We'll look forward to that. Don't forget, you can have Kramer delivered right into your inbox. He just talked about the morning meeting. Do you want to be part of that? Well, then sign up at CNBC dot com slash join the club or by using that QR code right there on your screen. You can get in the club with Jim. Up next, it's our Friday night fight. Jim Labenthal and Steve Weiss battling over one stock

that's already gained 50% this year. Jim loves it. Steve Weiss doesn't own it anymore. Is that a mistake? We'll find out next. All right, welcome back. In today's halftime overtime, the massive run in Cleveland Cliffs stirring up a big debate lately.

Steve Weiss selling out, Jim Labenthal doubling down. So is the stock topping out or just getting started for a new leg higher? Here's what Jim said yesterday on the half. If I'm not selling a share and I think it's going to the mid to high 30s at $31.95, which is where it is right now, if you do not own shares, you can buy it right here okay let's welcome in jim labenthal and steve weiss to have this conversation because steve weiss is the one who sold this stock not all that long ago why'd you get out steve well i got off the simple reason that I did well in the stock, but I'll sell stocks where I lose money in it as well. To me, what's going on right now is all related to the Russia-Ukrainian conflict.

That's driving commodity prices up, scarcity of raw materials. Look, you've got a phenomenal CEO at Cleveland Cliffs, I think the best in the commodity industry. But that's just not enough. So at the end of the day, this isn't a growth company. Jim himself has had a moving target on this company, while the core fundamentals, the long-term fundamentals have stayed the same, which is to pay down debt, which is what they said they would do. They're doing it to shrink the share count, which they're doing it. But when I look at the end of this, and what I mean, the end of the conflict and the world goes back to normal, I've still got a steel company that next year in 2023 is going to have meaningfully down earnings. So the multiple

right now on next year's number using consensus is going to be 11 times. That's quite a bit for a highly cyclical company'll be one that's fully integrated so you don't go wrong taking a profit uh jim keeps moving his price target he was a 24 he was a 25 26 30 now mid to high 30s so i'd like to congratulate him on predicting the ukrainian conflict when nobody else did so he'd be a great sell side analyst he'd be a great sell side analyst. He'd be a great sell side analyst moving his price target up as the stock goes up. But seriously, Jim, Jim, this is not a growth company. I think you can underscore everything Steve said with those words. No, you can't. All right. So the things that he just said have a lot of errors in them. And let's

start with why have I moved my targets up? For one very simple reason. The results continue to exceed my expectations and those of the analyst community. Case in point, last week, the company announced that in January, they did $588 million of EBITDA. That's almost half of this year's, excuse me, this quarter's estimates. And that was in January before Russia-Ukraine. So that had nothing to do with Russia-Ukraine. The estimates are going to clearly move up. Steel prices were depressed in January. Now they're through the roof because of Russia-Ukraine. They're going to be blowing the doors off of this quarter's and this year's estimates.

And even if Russia-Ukraine came to a ceasefire, the sanctions aren't going to be over. What you've got in Cleveland Cliffs is a company that controls its own raw materials. It mines its own iron ore. It bought a scrap metal company a few months ago from which it sources scrap metal. If you're looking at a new core or a U.S. steel, they need Russian and Ukrainian pig iron as a raw material. This company has been led by a genius and it's showing up in the results that continue to come in better than expected. And that's why I raised my price targets. So I have absolutely no hesitation about continuing on with the position. Jim, I mean, Steve, Jim's right until he's wrong, right?

Yeah, I mean, look, you take a look at the end markets that steel goes into. It goes into construction. Now, not so much single-family homes, although it does go into there. And look what you're seeing there. It goes into autos. The auto stocks have been decimated because of what they're looking at going forward. And the bottom line is you've got a Fed that has one goal in mind, to take down inflation, of which Cleveland Cliffs has been a beneficiary of, and to massively slow the economy, because that's the only way you can target inflation.

And Cleveland Cliffs is in the crosshairs there. Look, over time and time again, you know, you've seen commodity cycles and commodity hedge funds. And commodity hedge funds generally have a useful shelf life of one good year, three years at the most. That'll be the story here. It is a commodity company. Yes, Josh, be quiet. I'm on the show here.

But you've got a company here that ultimately is a commodity company. So I just don't think it can go to the moon. And look, do I regret selling it? Only because it's gone up meaningfully since I sold it 25 or so. But, you know, I don't regret sticking with my discipline because it keeps me out of more trouble than it makes me money. So I mean, I've got year to date, Jim, 52 percent. Why isn't the prudent move to take your money and run? Because this cycle is very far from over. And the end markets

that Steve just cited, if he's citing residential housing, it has nothing to do with Cleveland Cliffs. Yes, autos is a key end market. Hang on, Steve, just hang on. Yes, autos are a key end market and the demand there is pent up and will last as this economic cycle lasts. Why will the economic cycle last? Because of infrastructure spending that's already been approved and funded. Because of corporate capex on factories and supply chain onshoring as a result of the end of globalization. That is going to last for years. There is going to be demand for steel. Cleveland Cliffs has the raw materials with which to produce it.

The others are beholden to Russia and Ukraine, and they're not getting their raw materials from there anytime soon. I'm sorry if you can't see past a mid-cycle slowdown. You can leave the gains on the table. I'm perfectly happy keeping them all to myself. We're going to make that the last word. You deserve it. You've been in the stock. You've been telling people to buy it, and it has certainly been a winner. Jim Labenthal, thank you. Steve Weiss, we'll see you back sometime soon. I know up next, the biggest risk or the biggest reward, how you should play the tech trade right now. Overtime's back in two minutes. Welcome back to overtime.

Wall Street closing out the day with a late session mini rally. The Dow and the S&P 500 finishing in the green. The Nasdaq ending with modest losses. But for the week, the Nasdaq was the real standout with a near 2% gain. And check out the move in Apple. That stock finishing higher again today for nine straight days of gains. Energy stocks posting big gains among the biggest winners in the session there. Kinder Morgan, Phillips 66 and the Williams companies and Moderna, Etsy and Penn National

among the biggest losers. It's time for a CNBC News update with Kelly Evans. Hey, Kel. Hi again, Scott. Hi, everybody. From the news on CNBC, here's what's happening. A top Russian general giving a rosy view of Russian military operations in Ukraine. He says first stage goals have mostly been accomplished. That allows Russia to focus on its, quote, main goal, the liberation of Donbass region in eastern Ukraine. The new language could signal a sharp narrowing of Moscow's military objectives. Back here in Maryland, a judge has struck down the state's new congressional election maps. It's the first map drawn by Democrats that has been blocked by a court in this redistricting cycle. Three Republican-backed

state maps have been found unconstitutional. In Cleveland, the Browns have introduced their new quarterback, Deshaun Watson. Watson strongly denied committing sexual misconduct despite allegations by 22 women against him. This was the first time Watson answered direct questions on those allegations. And on the news, what can be learned from comparing Russia's invasion of Ukraine to its annexation of Crimea eight years ago? Join me right after Jim Cramer, 7 Eastern, here on CNBC. Scott, back to you. All right, we'll see you, Kel. Thanks so much. Coming up, we're debating the tech trade. Is it now the biggest risk or still the biggest reward in the market? And later, details of Bernie Sanders plan to tax corporate profits at, get this, 95 percent. Ninety five percent. It's our outrage of the day. Details are coming up.

And don't forget to weigh in on our Twitter question. Head over to at CNBC Overtime. Cast your vote. We're going to reveal the results at the end of the show. We'll be right back on Overtime. Cast your vote. We're going to reveal the results at the end of the show. We'll be right back on Overtime. Welcome back to the OT. As we told you at the top of the show, tech has been on a tear with the Nasdaq up more than 10 percent from its recent lows. The question now is whether that sector has become one of the biggest risks in the market or can it continue to provide big rewards? Let's discuss and debate with Wedbush's Dan Ives and Dan Suzuki of Richard Bernstein Advisors. It's good to have you both with us. Dan Suzuki, to you first. You're the one with the big headline that this now is the biggest

portfolio risk being tech and growth. Why do you say that? Well, first of all, Scott, you know, thanks for having me. But if you think about a typical 60-40 portfolio, if you're invested in that 60s, invested in the S&P 500, it's really three sectors that make up 50% of the S&P 500's market cap. And those three sectors are heavily, heavily dominated by tech and tech-like companies. So right off the bat, 30% of your 60-40 portfolio is at risk. We also think the other big risk is interest rates and inflation, which directly impacts the other 40. So when you put those risks together, you got 70 percent of a typical portfolio is at risk. But tech is a big one. Tech is a big part. But haven't we proven since the most recent lows, Dan Suzuki, that

I mean, rates have been going up and tech has been going up, too. So maybe it's a misnomer that as rates rise, tech can't. Yeah, I think that's right, Scott. I mean, I have been going up and tech has been going up, too. So maybe it's a misnomer that as rates rise, tech can't. Yeah, I think that's right, Scott. I mean, I've been very clear from the very beginning. It's not just a rate story. I mean, our view is separate from rates. I mean, the story that's tied to rates is that tech has benefited from this ultra surge in liquidity that you've seen, not just over the last few years, as well as the last 10 years.

But it's not the only story. I mean, we're at the point where you have to remember every bubble starts out by being driven by fundamentals. So, you know, tech before it became a bubble had outperformed the S&P 500 by double. Why? Because its profits grew by double. So there's a real story there. I just think at this point, the expectations, the valuations, everything is too high and people are not discounting that. People have to separate the story from the investment. I'm a believer in the story. I think tech is going to change the world. I think these are great companies, but it's very different from the investment side. And we learned that lesson 20 years ago. And I think we'll learn that lesson again. Why is he wrong, Dan Ives?

Yeah, I mean, look, I couldn't disagree more. I mean, in my opinion, I think tech is as oversold as I've seen in the last five, six years. Given the growth we're seeing, especially on the shift to cloud, digital transformation, that's accelerated, not decelerated. I mean, growth in tech is 3x historical growth, which I believe that we're just in the start of what's going to be a massive move up for tech stocks. I think bottom was put in last week, as we talked about. And to me, it's a table pounding time for tech. And look, the haters will hate. But to me, it's a green light doing tech here. Well, let me ask you this.

We've had a huge bounce. So what was maybe the most oversold that you've seen in a number of years? Can I make the case that some of these stocks at this point are now overbought? Look at the moves that they've had. I mean, Apple's up 16 percent since the low. NVIDIA is up 33 percent since the low. Tesla's up 43 percent. Microsoft 12 and on and on and on. I mean, I would say that even the street right now is underestimating growth in tech coming from Apple to Microsoft to others, but by upwards of 15% for the year. So when you start to factor that in based on all of our checks, I think we are going to have a one

cue that's going to be just a headline, massive beaten raise across the board, especially on areas like software, cybersecurity. I think Apple's heading for a significant beat. So in our opinion, I think it's just the start of what was really just a massively oversold tape, you know, in terms of this risk off. But when I look at the underlying growth drivers in tech, I think tech from here is up another 25 percent. Even if interest rates continue to rise at the speed in which they have already. I mean, we're talking about some fantastic moves over the last even couple of days. Yeah. And look, I think the New York City cab driver knows about the interest rate

trajectory for the coming year and a half. And that's our view. It's that last week, Fed ripped the Band-Aid off. It's all known. Fools and bears will fight out. But in terms of valuation, what's known relative to growth, I think this tech tape, it's a table pounder to own here. And that's what we've been advising clients, especially over the last few weeks in terms of where to own it, software, cyber. I think Apple, I think Apple exceeds $3 trillion yet again. I look at names like Microsoft, Salesforce, Oversold. And I think that's sort of our opinion in terms as we're going into earnings in the rest of the year. I mean, he couldn't disagree with you more, Dan Suzuki. Those were his words, not mine. Yeah, Scott, first of all, I'll say two things here. First, Dan Ives is an excellent,

he's an expert in the space, and he's probably forgotten more about the ins and outs of these individual companies than I'll ever know, right? So let's just be clear there. And secondly, I'd say that, you know, I think that on a short-term basis, it's probably true that these things got oversold. I mean, these things don't go in straight lines. And nothing that I'm hearing and nothing I'm seeing is actually all that different from what we saw in 2000. Two months into the tech bubble crash, you had 90% of stocks in the tech space down over 20% in the bear market. You had 50% almost that were cut in half, right? And that preceded like a 30% plus rally in those stocks, only to fall another 82%. And by the way, this whole

argument that, you know, it's different today because back then none of the companies made any money. Well, if you look at the biggest tech stocks in the index back then, IBM, Microsoft, Intel, they were among the most profitable companies in the entire market, right? So this idea, and that didn't save them from going down, you know, 60 percent on average and taking 13 years to make your money back. So, again, it's really about not that these are bad companies. They're excellent companies. But you've got to separate the story from the investment. And I think just returns are graceful. Capital is scarce. Capital is just not. Let me let me be clear, Dan, I was with you as well.

We're not just talking the facts. I mean, when you suggest that you would strongly be buying and this is part of your headline, you'd strongly be buying cloud and software stocks. I mean, these are among the ones that were hit the hardest. Are you suggesting that some of those names that got absolutely destroyed can get close or even back to their highs? Well, I think it's going to be a bifurcation across cloud. I think names like Microsoft, I think Salesforce. I think, of course, there's going to be names across the board like DocuSign. I think at that point, it's sort of catching the falling knife. Some of the work from home sort of COVID beneficiaries. But overall, when I look at cloud cybersecurity, especially names like cybersecurity, Zscaler, CrowdStrike, you look across the board, a bunch of those names.

I think cybersecurity from here could be up 35, 40 percent rest of the year. It's a golden age for cyber. They benefit on both sides. It's a defensive play as well. And that's sort of been our handholding strategy for investors. And Palo Alto is still your favorite name, right? Palo Alto, it's like I've told you, I think in the last decade, it's probably a top three table pounder that I've ever seen. I think that stock has a seven in front of it. All right. The Dans. I appreciate your time. Suzuki and Ives, we'll talk to you again soon. Up next, we're following new developments out of Capitol Hill. Senator Bernie Sanders taking aim at names like Apple, Pfizer and Chevron.

You won't believe the details of his new tax plan. We'll discuss that next. And later, a Friday edition of the two minute drill. Three stock picks for your portfolio. Don't go anywhere. Overtime's back after this. Welcome back. Is a hefty tax on the biggest companies in this country the answer to soaring inflation? Well, Senator Bernie Sanders apparently thinks so. Our Ilan

Moy with us now from Washington on a new proposal the senator just introduced. And this is quite something even from a self-declared socialist senator, Ilan. Yes, Scott, he never pulls any punches for sure. Democrats have been blaming rising prices on profiteering by corporate America. And the solution, according to Senator Sanders, is a big new tax. The ending Corporate Greed Act would impose a 95 percent tax on profits above pre-pandemic levels. This goes beyond similar proposals aimed at the oil and gas industry to cover any company in any sector with more than $500 million in revenue through 2024. Now, under his plan, ExxonMobil would have owed another $9.5 billion in taxes last year. JPMorgan Chase would get hit with an $18.8 billion bill. And Apple would fork over an additional $35.4 billion. Now, all told,

Sanders estimates his plan would raise $400 billion in just one year from 30 of the country's biggest companies. In a statement, he said, quote, during these troubling times, the working class cannot bear the brunt of this economic crisis while corporate CEOs, wealthy shareholders, and the billionaire class make out like bandits. Now, this is unlikely to pass, Scott, but it just shows you how frustrated Democrats are with inflation. And it's a little taste of the messaging you're going to hear heading into the midterms in November. Back to you. Frustrated that they're being blamed largely for it.

I mean, the president's approval rating on the economy is horrible. And it was just a matter of days ago that he tried to blame inflation on Vladimir Putin and the war in Russia. So this seems to be an effort to clearly change the message. Yeah. So whether you agree with it or not, Republicans have the advantage of a very clear and very distinct messaging on inflation. They say unleash American energy production. And this is the result of unfettered government spending. Democrats have been pointing the finger all over the place and try to find a scapegoat for higher prices. And so they've looked at President Putin. They've looked at corporate prices. They're looking at cutting the gas tax. They're trying to find what is going to stick with voters and in voters' minds so that they can win at the polls in November.

You said it's unlikely to pass, but this feels like it might be DOA before the ink is even dry. Well, I think it gives you a sense of where Democrats are headed. I mean, we've heard similar proposals around the oil and gas industry. You're seeing a lot of Democrats sort of talk about how to ensure that any benefits from a gas tax holiday don't go to corporations. They go to the consumers instead. How do you help the people on the lower end of the income scale? So these are the themes they're going to be talking about, whether or not it's actually in this particular form. Yeah. Interesting. That's to say the least. Thank you. That's a line boy down in Washington, D.C. for us.

The latest on Bernie Sanders, Senator Sanders proposal to tax companies heftily on their profits. Up next, Santoli's last word. And today he's raising the red flag on what he thinks could trigger a series of major market stress events. We're going to explain. Plus, a cheap way to play the EV boom. We'll reveal the stock in today's two-minute drill. Overtime, we'll be right back. Mike Santoli's here for his, Santoli's last word on this Friday. What do we have? Well, I'm on accident patrol. And I think it's interesting and relevant and somewhat comforting that we actually haven't seen any real financial mishaps, any kind of blowups just yet related to

these really violent moves in yields, in commodities to a lesser degree. I mean, the 10-year Treasury started the month at 1.7. We're at 2.5 today. The two-year yield is even more dramatic. Everyone's talking about the year 1994, the last really aggressive tightening cycle that resulted in a soft landing. That's what Fed officials keep referring to. 1994 was littered with accidents of a financial kind. Closed end bond funds blowing up. Orange County went bankrupt. Right. Corporate derivatives losses, all this kind of stuff. And the tightening kind of went until something broke. Right now. Not so not so. You know, I guess we can sort of say watch for it.

It's not there yet. Credit spreads behaving. We watch them and you notice little things that, OK, maybe I need to watch these closer and then things ease. They do. And the thing is, you never know in advance, you know, exactly where the pockets of leverage were that you didn't recognize in advance. I do think, though, the level of yields is maybe not as important. That's why everyone talks about, you know, it's the velocity. It's not that you can look at what's going on with the London Metals Exchange and say that's a small version of, you know, losses being kind of swept through parts of the market. But right now, not catching it yet. Hopefully, you know, that part of the 94 analogy doesn't hold up. I mean, as you're talking, I'm literally looking at yields on my screen today.

I mean, you don't see 7% and 8% moves in yields very often in a single day. And we just say, OK, well, the two years at 230 and the 10 years at 250. And then you're looking like, wow, OK, that was a 7%, 8% move in a single day. And as much as I usually am hesitant to do the percentage move in a percent thing, mortgage rates year over year, it's like 60%. So that's just your kind of incremental interest expense on a mortgage. So things are moving fast. You have to be aware of it. Markets absorbed it. OK, so far, that's so far you can lean back on that and say it's OK.

I mean, look, the biggest potential, you know, near term, quote unquote, accident is something regarding Russia and Ukraine. And the market has become somewhat sanguine to what's happening there. At least that nothing systemic is going on right here. You know, I mean, yeah, energy prices are a risk or a headwind, but they're not kind of roaring ahead to new highs just yet. So it seems as if we're able to metabolize all this stuff without too much trouble so far. For now, because earnings are not next week, right? They're in a few weeks. So it's going to be some time before we really start put the proof with the pudding and see if they live up to what we expect. Well, corporate results might even be the buffer. You know, I mean, the corporate sector is in good shape. It's under levered. They're buying back

stock. There's cash there. So I do wonder, I mean, obviously the earnings outlook matters a lot, and they're going to give us a hint on that. Well, look, last quarter, the banks weren't great, right? And JP Morgan hasn't really been the same since in terms of a stock. Is that the report you want out of the gates? And that's going to be the one we focus on and say, OK, either earnings are going to be good or oh, it's been the big disappointment in a crowded trade of the year. Probably is everyone piling in the banks in the first two weeks of January. The results come out and it's been pretty much a bust. He's Mike Santoli. That's his last word. Have a good weekend. All right. Thank you. Coming up, we're rounding out the week with three more top picks for your portfolio.

Don't go anywhere. The two minute drill is next. We're back in overtime now to the results of our Twitter question of the day. We asked what's the best safety trade right now? Is it Apple? Is it bonds, gold or something else? I suppose I'm not surprised you said Apple. Fifty one percent of you did. Interestingly enough, gold was number two at twenty four point three percent. A lot of you also voting for energy, health care, some in Bitcoin and Google as well. So another mega cap tech getting in the mix as well. It's time now for our two minute drill. Three stocks for your portfolio before we take you into the weekend. With us now is Payne Capital President Ryan Payne. Ryan, it's good to see you. Welcome.

Your first pick is letter F, that being Ford, which has been a bummer to say the least this year. Why are things going to turn now? What I love about this stock is it's like the cheap EV play, right? Tesla trades for 100 times Ford earnings, Scott, which is absurd. Meanwhile, if you look at Ford specifically, they're breaking out their combustion engine division and they're going to break out their EV division. They're going to put like $50 billion into the EV division. They're going to have like producing somewhere like 2 million EVs by like literally 2026. And I mean, how awesome is the new F-150 Lightning and that

Mustang Mach 4? And if you look at that Cybertruck from Tesla, it's just not that cool. I wouldn't want to use it. So at eight times forward earnings, dirt cheap. It's a great way to the EV space and not on top of that, you're getting a nice dividend over 2%. So I think that is definitely a way to play even. Got to buy it now and hope to wait till 2026 because they're barely producing anything right now. That's part of the issue. It's interesting that you're making it as a pure EV play. Kinder Morgan, commodities up, oil's up.

This plays into that story? I really like it because oil is extremely volatile, but the midstream space specifically, you're just moving the natural gas and you're moving oil. And essentially, it's more of a volume play. And with Europe now looking away from Russia for their natural gas needs, you really have Kinder Morgan is a really well-positioned play for that. And we have energy pipelines in our portfolio. And they're returning so much money back to shareholders. They're getting a 6% dividend right now. They're paying down debt. So I think they're well- well positioned here because fossil fuels are not going away. EVs are going to be great in the future. But in the meantime, if you look at

oil demand, it's going to be high for the next decade. Give me 15 seconds on Darden restaurants. OK, we all love the Olive Garden. It's like 50% of the revenue. Love those unlimited breadsticks. And essentially, everyone's going to go out. They're going to want to go to restaurants. There's huge pent-up demand for that. And they're very reasonably priced. They own a lot of different restaurants. We have Red Lobster's in there. Season's 44.

Awesome place to be. And the stock has gotten hit a little bit because their earnings didn't come in as good as expected because of Omicron. So there you go. All right. Have a good weekend.