Closing Bell - Closing Bell Overtime: May 11, 2022

Episode Date: May 11, 2022

Stocks closed near the lows of the day in another volatile session. Are investors in denial about a bear market? Josh Brown from Ritholtz Wealth Management weighs in. Plus, Tom Lee from Fundstrat Global Advisors explains why he is not wavering at all on his bullish outlook for the second half of the year. And, Michael Santoli’s “Last Word” is “Bear.”

Welcome, everybody, to Overtime. I'm Scott Watney. You just heard the bells. We, of course, right here at Post 9, just getting started in what is a busy overtime session today. In just a few minutes, Disney earnings will cross the tape. We'll have those numbers and, of course, the instant stock reaction. We'll also speak with Fundstrat's Tom Lee today on whether stocks are getting closer to a bottom. A look at the action today. Hard to suggest we are. That's our talk of the tape, though. This hunt for the end, an end to the selling that has caused so much uncertainty for your money. Are we getting closer? The big question we ask Halftime's Josh Brown. He is the CEO of Ritholtz Wealth. Once again, joins us here. That is the question, Josh. What's your sense?

I am informed that as of today at the close, we now have all five of the FANG stocks in a bear market of their own. They finally got Apple. This was the last holdout. It went out down 19.59%. I think a little bit more in the last minute of the trading. That's the last quote I have.

So that's it. You got everything from Meta down 50% to Apple down 20%. These stocks are so important. They were the last ones to go. Today they hit Home Depot. They hit a lot of the last holdouts. And it doesn't mean that anything is wrong with these companies. Something is substantially wrong with the market.

We still have so much denial, Judge, that I do two or three of your shows every week, and I'm still having pedantic debates with people about whether or not this is a bear market. I almost can't believe it. I've been talking about this being a bear market since February. It's okay if not everybody wants to acknowledge it all at once, but here we are in the middle of May.

The damage is way worse than anything that we saw in 2018. And that, in fact, was a statistical bear market. So until everyone can agree, hey, this is the real thing. I just don't see how we bottom. Let me say two constructive things very quickly. This began in the bond market. It's the only place where it can end. Finally, though, we're seeing bonds catch a bid. Not every day, but buyers are stepping in at certain levels. Three and a quarter might be it for the 10-year. I don't know. I don't know.

I don't think the Fed can go Fed funds 3.5% or whatever is being expected without completely crashing the market and the economy. I really just don't think so. So I would take the under on the market consensus at this point. Look at what two rate hikes have wrought. OK, and now we're starting to hear about hiring freezes. You know what comes next. So that's where I am. It's a bear market. Hopefully you had some sort of modicum of realism about the way you've been investing this year. And the number one thing that's changed, Santoli said it in the last hour, there's no rush. What is the rush? Go out and buy a stock that's down 18% today. You already know it's going down tomorrow or the day after. That

is a huge shift in the mentality of this market. That is the attitude adjustment that had to come and we're there. So is this the end? I don't know. I think there's a lot less risk starting to buy here than there was two weeks ago. I mean, obviously, mathematically. And the best thing that you can do for yourself as a regular investor who's not watching all day, automate those decisions. If you're a buyer of $500 worth of stocks a month, then just stick with that. Don't act like you're a hedge fund manager if you're not going to be sitting in front of the screen all day. Way too difficult. I mean, it's been frustrating. And Santoli, whom you just referenced, used the word grind.

It has been. It's a grind. And it's not a pretty or a comfortable grind. And you mentioned those large cap technology stocks like an Apple, right? Gave up 150 today. It's at 146.50 in overtime. Microsoft, these are all the levels that you said, Josh, were so super important to hold. 270, 275 was the level on Microsoft. That stock is now at 260. The implication of what you said to begin our program today is that the market cannot find stability until those stocks now do. They might have the weakest recovery. Here's what makes this so tough. All of that I just cited, the S&P 500 itself is still not down an actual 20%. Think about how insane that is.

How is that possible, you might ask? When you're getting all kinds of support from names like UnitedHealth and EnergyStops and Utilities, they are keeping the lantern lit. I don't think that that can really last for much longer. I really feel that listening to the old timers, the guys that have seen this many times, like Art Cashin, that that need for like a true, true washout day, circuit breakers and everything might be what the doctor ordered. We all want the bottom to come. Very few people are like, I think more of this would be better. So I say this with no glee whatsoever. But if you've had trouble for the last four months identifying the fact that

we are in a statistical downtrend, I mean, I really don't know what you're looking at. You must learn technicals. You must. You cannot go on thinking that people's economic opinions are going to help you in a tape like this. And that's where we are right now. You know, you use the words old timers that those were your words, not mine. I'll use finally seasoned and I'll reference what Leon Cooperman told me yesterday right here in overtime when I asked him, look, you've been through decades of these kinds of markets. What are you looking for? And he said the best evidence of a bottom is a company comes out with disappointing earnings. The stock opens down and closes the day unchanged or up. We're not seeing that at all. So the stock market has not yet discounted the economic slowdown that we're experiencing,

in my opinion. Now, I bring that up to you, Josh, because I've had my eyes on Roblox all day long, right? The stock reported earnings yesterday during overtime. It was down, and it was down a bunch. That ain't going to be the one. And then, no, I know, I know that, but I'm just bringing up as a reference, that stock was up really nicely today. And I've had my eye on it saying,

is that one of the ones that you'll look back on? And you know what? It gave up almost everything into the close. Yes, it closed higher by three and a third percent, but it was up a lot. It was up more than four times that from a percentage point earlier today. So we're still not even getting that follow through on things that seem to be turning around. You saw it in the overall market. You give it up by the end.

Look, the no urgency thing, once that mentality sets in, you get a spiral to the downside, just the opposite of 2021, where it was like, oh, my God, I got to get in. I'm being left behind. Right. SPACs, IPOs, crypto tech, big tech, little tech, biotech, that mentality is now the polar opposite has set in here. And it's tough to break that spiral. Why would anyone rush out, buy a stock at 30 bucks that was 50 last week, even if it went back to 35 on a green day in the market? Who cares? People have taken on a lot of water and they're not looking for that bounce right now. And they're not particularly worried about missing it. We've had a lot of big bounces that have petered out

and everyone is now catching on. That's what a bear market is, that's the definition when the rallies can't hold. So rather than worry about a company with bad news, the stock goes up, especially in a case that small, think about this, we to see momentum divergences beneath the surface. We want to see advanced decline divergences, meaning a new index low in the S&P, but only about half the stocks that made new lows last week make a new low this week.

That's the kind of divergence where you look at and you say, OK, maybe the sellers really are exhausting themselves. We're not there. The internals are getting worse, not better. You must understand that it's a market of stocks and individual participants are making decisions not solely fixated on the index level. Look at what that market of stocks is doing. Look at internals, look at momentum, look at RSI, focus on the numbers, not the opinions, mine included. The data does not suggest that this is the end. Let me apologize for cutting you off. I just want to let everybody know, and you can see it for yourselves on the bottom of the screen, Disney is out. And it looks to me to be a miss on the top and the bottom line. Our team's going

through it. Julia Borson's going to have more in just a minute. Guys, just tell me when Julia's ready. You know what? She is ready. Julia, what do we see here? Looks like a top and bottom miss to me. It looks like a top and bottom miss here, Scott, but we're not actually going to be comparing the numbers that they're giving us with analyst expectations for the amount due to an early termination license agreements for film and TV content as they move some of their film and TV content over to their own and operated platforms such as Disney+. So we're trying to understand if the revenues, which were $19.25 billion in the quarter, if perhaps it's not comparable to analyst estimates because of that $1 billion reduction. And then looking at the earnings per share number as well, the company reporting $1.08

adjusted, but it's unclear if that's comparable because it includes a $0.43 negative impact from that contract license early termination. But just want to get here to the streaming numbers, because that's what's been so much in focus here. Disney Plus reporting 137.7 million. That's better than the 135 million Disney Plus subscribers that analysts had anticipated. And the overall number of streaming subscribers for the family of apps that includes ESPN Plus and also Hulu. That is now $205.6 million versus the $204.9 million estimated. So Disney Plus growing much faster than expected. The other ones, not so much, but we are seeing that strength in Disney Plus and the shares are up 3%. Scott, I'm going to continue to dig through this release and want to figure out which of these

numbers are comparable with expectations. And we'll be come back. We'll come back to you with more. And we'll dig in particularly on the parks numbers. Scott. OK, I appreciate that. Yep. Julia Boorstin, thank you so much. Calls at 432. So there's a lot going on during overtime related to Disney. We, of course, will follow it. You can see that the stock is up and it clearly seems to be on the fact that subs beat, especially after what Netflix delivered. So you may have the comparables are a little bit difficult to decipher. Julia's going to continue to go through that. But when it comes to the subs number, not difficult to decipher. Looks like Disney beat, and that is a tremendous sigh of relief given what we've gotten

from some of the other streaming-related companies. Let's ask Disney shareholder Victoria Green of G Squared Private Wealth what she thinks of these numbers. You own about $3.5 million worth of Disney shares. What do you think, at least in the early going here, as I see the stock up about 6 percent in the OT? Yeah, it's a big sigh of relief. We were worried Q2 was going to be the weakest one here.

Actually, sorry, they're Q1. No, it's their Q2. But, look, they absolutely blew it out of the water. You had Hulu and Disney Plus and ESPN Plus, all ad subscribers. You know, after that Netflix miss, we were worried. We knew this was going to be a weak reporter. They're still going into new markets. So this is a great sign.

You know, they haven't come back off. They still want to be at $230 to $260 million by 2024. And I think they're going to hit that target. I mean, their intellectual property is just better than everybody else's. And so this is a big sigh of relief. We're going to have to see, you know, some of the things on the top and bottom line missed there, big into the average revenue per user. You're seeing costs rise a little bit at ESPN. You know, you're seeing costs rise some at Disney. So we've got to make sure we're still making good money on this. But the subscriber growth, absolutely huge sigh of relief that they definitely beat expectations there.

Well, because it's not the biggest part of the business, but if you want to argue from a multiple standpoint, it arguably is, right? That's what justifies a higher multiple for shares of Disney is the growth of the streaming business moving forward. We kind of know that, you know, the parks, the studio are going to be strong. Yes, there's some political risk maybe into this story now, but it is really all about the streaming. Yeah, absolutely. They have a little bit more diversification. They're kind of more like an Amazon or an Apple that the streaming is one segment versus, you know, a pure play Netflix. But streaming is the future. And the fact that they've been able to continue to grow subscribers,

I think a lot of that's their price point. We're also super excited. They're going to bring in an ad-supported tier probably. We'll be very interested to hear what they say about rolling that out. I know there's a lot of backlash at Netflix about adding advertisements, but they're trying to add it to an existing platform and existing users versus Disney introducing a cheaper format to their Disney Plus with ads. So that could continue to drive consumers. And look, if this economy continues to slow down and people are pinching pennies,

you've got Disney at about $8, Disney Plus, and get the whole package with Hulu and ESPN Plus for $15 versus Netflix at $15 itself as a standalone. People might start pinching their pennies. There's something now we're calling subscriber fatigue because people have so many choices now for streaming. And I think the fact that they have Marvel and they have Star Wars and they have absolutely fantastic intellectual property, I feel like they're kind of have the largest moat in streaming. And I think they're going to win the streaming wars. It's funny,

actually, they talked about maybe buying Netflix. You know, that's being thrown around a little bit because they sell their Hulu's sake and buy Netflix. Something to think about. Victoria Green, thank you so much for being with us right on the back of those earnings. Julia Borson has more color. Julia. Yes, I just want to bring you some more detail on the parks division. That's really what's driving the revenue growth at the company. The parks experiences and products division reporting six point seven billion in revenue. That's far better than the $6.3 billion expected. And just want to bring you some color from the report here. They say it was due to higher volumes and increased guest spending,

partially offset by higher costs at the domestic parks, and saying they saw increases in attendance, increases in occupied room nights, and cruise ship sailings at the domestic parks. So particular strength at the domestic parks. And we'll have to see what kind of commentary they give us about the summer bookings. But just really a lot of strength there. And the one last thing I want to say, just circling back to the streaming numbers, average revenue per user, there has been concern about Hotstar in some of the ex-U.S. regions not being as profitable. But they did see Disney plus hot star average revenue per

user growth 55 percent from the year ago period. So some strength there as well. Scott. All right. Good stuff. Yep. Julia, thanks so much. Come back if you need to. That's Julia Boorstin going through Disney. Josh Brown, let me go to you. What's your reaction to Disney? I don't think you own the stock, but nonetheless, I'm sure you have a hot take. I am amazed at where this stock is. This name started January of 200. It's 100 at its worst moment in early 2020 when the when the lockdown started. This thing was at 85. Are we saying that Disney is and that's when Disney Plus was in its infancy. It had just been introduced to the world a couple of months prior. So are we saying with a hundred dollar share price for Disney

that this company is in worse shape or in worse trouble than it was in March of 2020? That's how insane this market has gotten to the downside and how quickly. Here's a fun fact. Back to 1993, when the SPY ETF had its inception, right? We're talking about 29 years. Disney, at this price, has underperformed the S&P, underperformed over 29 years. This is one of the greatest companies in the history of the world. So this is how insane the selling has been in these names. I don't even think it's fundamental selling. I think it's like mechanical, computerized selling. There's no other answer. So I hope it can hold this after-hours return.

It's not that big of a market cap. It won't be terribly meaningful to the market mathematically. But if it stays green tomorrow, yeah, it could be very important. I agree with you, Judge. Sentiment-wise, because it's one of the worst Dow performers year to date. You also bring up an issue that makes me think, you know, when you speak of the kind of impairment, if you want to use that word that, you know, Disney has suffered and the points you make about going back to the early parts of the pandemic, if not, you know, just at the very earliest part, as so many stocks have become impaired by the way that the trading has been in this market,

it leads me to wonder if those are the stocks that you see start to rebound first, the ones that have gotten impaired the most through whether it's technical trading, mechanical trading, or whatever kind of trading has done that to blue chip names. One of my favorite sayings, J. Pierpont Morgan liked to say that during bear markets, stocks return to their rightful owners. And he said that 100 years ago. And that's when they used to have a bear market every year. Every October, they had a stock market crash. So he had a lot more experience with that than we do in the current era. But I do think what you said is very meaningful and people should consider that. At a certain point, the machines will run out of stocks to sell. Or at a certain

point, that trade won't be so automatic. And other machines that are taking the long side will start to win. And you'll get some stabilization. And the 10 or 12 percent of this stock market, that's actual people making economic decisions, will be able to take a deep breath. And when that happens, I do think stocks like Disney, you're going to see people say, oh, you know what? This doesn't make any sense. This stock's a buy. Let me break away. We're not there. Let me break away from you once again. Rivian is out. The stock is moving quite substantially, too. Philobo, what do we see here? This is basically a little bit of a relief rally, Scott. You have Rivian, while it technically missed on the top and the bottom line, definitely missed in terms of revenue coming in at $95 million versus the expectation of $130 million.

The loss of $1.43, a penny better than the expectation of a loss of $1.44. So, yes, you could, I guess, technically call that a beat on the top line. Smaller than expected loss. Cash flow roughly in line with expectations, negative $1.45 billion. But the relief rally is in the guidance being reaffirmed for production. $25,000 will be built this year. Then you've got full year EBITDA as well as CapEx also being reaffirmed. They talk about the supply chain during their investor lever. But essentially, what you have here, no big change, Scott. And that's what investors of Rivian were at least hoping for. You're not lowering your production guidance. Yes, they know it's a tough market out

right now in terms of ramping up production, but it's Yes, they know it's a tough market out right now in terms of ramping up production, but it's not coming down. There's no big surprise out there in these results from the first quarter. And that's reflected in the stock right now. Hey, Ford should have waited a couple of days. They should have waited for an 11 percent pop. They sold a million shares. In this market, they could wait a couple of days. It might be down to ten dollars given the way the market's going. I know. Look, the stock's down 70 plus percent a year to date. Phil LeBeau, thank you. That's Phil LeBeau with the Rivian

numbers there. Josh Brown, lastly and briefly, if you would, I mean, this was a stock in a group of stocks that you may look back on and say, yeah, maybe that was a sign of a top in the market. These EV stocks went absolutely wild. This was one of them, and it's come a long way back down to earth. This is one of the poster children. If you write the book about 2020, 2021, 2022, this is a chapter. We don't know if they're good at making cars. We know they're really good at selling stock. This had $160 billion market cap about, I don't know, six months ago or so. So this is just completely outrageous, even still at an $18 billion market cap. Let's see them make and sell some cars, and then we'll figure out what it's worth, if anything. But they sold stock to Bezos.

They sold stock to Ford Motor. Who knows more about autos than Ford Motor? So I think that's emblematic of how many people had gotten caught up in some of these bubbles. And they take a really long time to get all the way to where they're going. So don't get too excited. I appreciate it. The one and only Josh Brown. Thanks for spending time with us in overtime. I'll see you soon. I know that. Let's get to our Twitter question of the day now. Which of these mega cap tech stocks that we started the show talking about look most attractive to you now following yet another pullback in them? Is it Apple sub 150, Microsoft sub 270?

Amazon's been banged up. Meta's been cut in half. So which one do you like? You can head to at CNBC overtime on Twitter. Cast your vote. We'll bring you those results at the end of our program. Coming up, we're just getting started here in overtime and up next, Fundstrat's Tom Lee. He has four key things he is watching that could, he thinks, dramatically ease the recent market volatility. He'll tell us exactly what they are. Plus, a late day trade alert. One trader is making a big bet that rates are topping out. We'll take you inside that strategy and take a look at shares of Beyond Meat down 21 percent in the OT. We're going to have much more on that coming up as well. We're back in two. Back in the overtime, stocks closing near the lows of the day in another volatile session for

your money. Our next guest, though, as you know by now, is looking for the market to recover and do well in the second half of the year. He is CNBC contributor Tom Lee from Fundstrat. He joins us now at Post 9. Welcome back. Hey, Scott. We've got to stop meeting like this. I mean, honestly, you keep telling me things are going to be all right, Tom, and then the market doesn't do what you say it's going to do. I mean, I don't know what to make of it. It's painful. I mean, I'd say anybody who owns stocks today feels like they're caught in like a vortex of downward misery. And I'm sure a lot of people are questioning their own sanity.

I think Josh made some good points even about a stock like Disney. But I think before people start to lose too much hope, this week is interesting because the stock market declines have accelerated downwards, right? So we're, like, the waterfall's accelerating. But things that normally would corroborate a waterfall decline like yields or VIX have not been. So, you know, the bond market's actually been pretty stable even in the face of a hot CPI. And the VIX actually has been falling. So it looks like the market's actually short volatility. Well, I mean, the VIX is still elevated.

Let's not act like it's, down that much. It just hasn't approached that level, let's say the 40, for example, that some talk about as the level you would like to or need to see to have a true capitulation sort of a feeling in the market. Correct. But at the same time, the fact that the VIX is stable means it's found equilibrium so that the level of protection that or expected vol that the market's looking for is now stable. And I think if you're getting negative surprises fundamentally and someone's trying to seek protection, the VIX should actually be spiking or rate should be falling. And instead, we just have the stock market selling up. So I think one thing that's going to stand out in the last couple of weeks is the fact that we declined 16% in less than four months.

That's only happened 16 times uniquely since 1940. So we're in a different mode where I think it's not about fundamental now. It's a technical decline. But the good news is of the 16 instances, 12 out of the 16 times the market was higher. Six months later, average gain is more than double digit. And 15 of the 16 times the market was higher. 12 months later, average gain is 20. So we're in a zone where if the market finds its footing, we're in a world of double digit expected returns.

But isn't this, you say it's a technical-led decline. Isn't it both? Isn't it fundamental and technical? I hear you on the technicals, but there are serious concerns about the state of the U.S. economy and the consumer going forward. That's a great point. But let's say I was worried about earnings for the next 12 months, and so I want to buy companies that will grow faster than GDP. I think we would all probably come back to looking at names like Microsoft, Apple, Facebook,

and then we'd say, well, I want to buy these, but they're trading at below market multiples, Facebook at 11 times. And so I don't think it's investors necessarily worried about earnings, because if they were, they'd be buying stocks that have earnings visibility. I think it's pure. It's all denial. What if they're in total denial? What if they're there in as much denial as some of the analysts are who haven't taken their earnings projections down? I mean, isn't that the next thing to go? Yeah, I think that's actually a good point.

I think that the market is debating if this is a hard landing versus a soft landing or a growth scare. And I think in the past week, the betting is on a hard landing. And so if that's the case, then, of course, things could get a lot worse. I just would expect things like high yield to be getting crushed and spreads to be blowing out. And so it's almost a hard landing, it's getting priced into equities, but it's not as apparent in other markets. Let me ask you a couple of things and then I got to go. Each day that passes and feels terrible and looks bad and you close on the lows, and it's that slow grind, as Mike Santoli has suggested, are you wavering at all on your call

that we could still have a great second half of the year and finish 5,000 or so in the S&P? Are you wavering at all? No. And I'm not trying to be stubborn, but to me, I would be worried if there was a leverage problem in the economy. In other words, are consumers in huge trouble because they've brought too much to our businesses? That's not the case. But we know rates have gone up, so cost of capital has gone up. And I think we're just seeing all asset markets

trying to reduce the prices of things that don't have high returns. You've seen credit card debt levels, right? Yes. They're up, right? People have had to pay more for automobiles. Houses have been hard to come by. People have paid up for houses. Who knows if they use adjustable rate mortgages? I mean, I don't know if everything you're saying about the consumer being so strong is 1,000% accurate. Well, Scott, again, the future is uncertain. But again, housing, we know, is a structurally short market because we underbuilt. And it will take some time to build enough homes.

But that doesn't mean consumers shouldn't be buying a home. It's just the affordability is coming into question. I'm talking about the idea of all the leverage. Last thing, and then I really got to go. Your beef strategy, Bitcoin and Bitcoin equities for starters. Bitcoin's gotten taken out back and beaten up. And Bitcoin equities, I mean, I want to buy Coinbase? Really?

Yeah, well, unfortunately, the Bitcoin equities are beta to Bitcoin. And Bitcoin's been in a world of hurt. It's a high beta to risk assets. It's been tough to own. But again, Bitcoin's a hyper volatile asset. Drawdowns like this have happened. So I don't think Bitcoin's down for the count. But it is in a tough spot.

And the FAANGs. Bitcoin's so correlated to NASDAQ. Now, as Josh said, they're coming after the FAANGs, or they've gotten the FAANGs now. That doesn't concern you at all? It's a principal part of your strategy. Yeah, the FAANGs have been very disappointing in terms of equities. They're great businesses. I don't think they're going to be as hard-hitting in a growth scare, recession risk scenario, and the valuations are cheap. So I know

they're crowded, and I think people want to get out of anything, and they're selling what they can sell. But FANG, to me, is an example of why the market is fundamentally offering good risk where they've gotten cheap. Okay. We'll make that the last word. I give you credit. You show up, you answer the questions and you give your opinion and we'll see if it holds true or not. And we'll continue to ask you and I think you'll continue to answer them. Thank you. Great. Tom Lee from Funstrat joining us now. It's time for a CNBC News update with Shepard Smith. Hi, Shep. Hi, Scott. Thanks from the news on CNBC. Here's what's happening. A bill that would give broad legal protection for abortion nationwide failed just moments ago in the U.S. Senate. That was expected. Democrats introduced the bill,

but only 49 of them were on board, well short of the 60-vote requirement to defeat a filibuster by the Republicans. Ukraine shut down a pipeline today that carries Russian natural gas to Western Europe. The immediate effect is likely limited because Russia can divert gas to other pipelines. Still, it is the first time since the start of the war that Ukraine has stopped the flow of gas from Russia. And a New York judge lifting the contempt order against former President Trump for now. Last month, he was ordered to pay $10,000 a day until he turned over documents to the New York attorney general in the civil probe of the Trump organization. The judge pausing the daily

fines today if Mr. Trump turns over more information by the end of next week. But he still has to pay $10,000 in fines accrued so far. Tonight, analysis of today's inflation numbers, plus a casino scam in the metaverse and French fry oil that can fuel a jumbo jet on the news right after Jim Cramer. Seven Eastern CNBC. Scott, back to you. All right, Jeff, we'll be there. Thank you. That's Shepard Smith. Up next, a late day trade alert. One halftime committee member is making a big bet that rates are topping out. We'll take you inside that action coming up. Plus, the former Dallas Fed President Richard Fisher is with us. You think there's a few things to talk to him about? We're going to get his take on inflation, what the Fed is doing, whether it has a credibility problem. Seventy five basis points.

The whole nine. We're going through it with Mr. Fisher. And we're still watching shares of Disney. The company's call now underway. We, of course, are monitoring that. We will break in with any. Fisher. And we're still watching shares of Disney. The company's call now underway. We, of course, are monitoring that. We will break in with any big headlines. The stock in extended hours, what we call the OT, is up 3 percent and we're back in two. Inflation coming in hot again in April. The consumer price index accelerating at 8.3 percent from a year ago, still near a 40 year high.

Let's get reaction now from former Dallas Fed President Richard Fisher. Richard, it's good to see you. It's been a while. I missed you, Scott. I missed you. Welcome to our new program. Let me ask you this and we'll get to the CPI in a second. And I just want to be straight. I want to I want to get this. Did the Fed make a mistake by taking 75 basis points off the table? I don't think so, because I think they needed to move and show they were deliberate

and move further. The way that Jay Powell handled the press conference, I think, signaled they would continue. 50 basis points is a good step, but they have a ways to go. Right. But why why why would you remove the or at least give the the feeling that you're you've taken it off off the table? Doesn't that hurt the Fed's credibility, Richard, as some have suggested? Why not leave it open ended? We're doing 50. We just did 50 and we're going to see see what happens. Why put yourself in a corner? Well, the Fed's credibility was damaged by the decision model they adopted, what I call the horse out of the barn model. That is, you wait to see whether inflation is there, and then you act. It takes 12 to 18 months for monetary policy to affect the real economy. And now they're behind

the curve. So the point is they're moving in the right direction. They have a ways to go. Twenty five base points to start. Fifty next. Probably two or three more fifties, maybe a seventy five. But they don't want to scare folks into thinking they have really lost control, which I think seventy five base points would have done scott yeah i mean the market seems to be voting if you will that they have lost control that they've the markets pushed jay powell over to ride shotgun because the market doesn't trust that they know what they're doing at this point well they'll have to regain that trust and the best way to do it is to show that you're determined you're not going to give in you're going act, and you're going to slay this dragon of inflation. Just remember that good old Yiddish expression, which is,

man plans and God laughs. Well, the Fed plans and God is laughing right now. And now they just need to come back, show determination, get it done. It'll take longer. Rates are going to go higher. And we've had a market, Scott, that for almost a generation here has seen nothing but low inflation, non-inflation and free money. It's over. That's why we have this volatility. And there's a lot of people that have been engaged in this market that have never experienced anything else. They've been spoiled. So now they got to go ahead. I'm sorry. No, you finish your thought, Richard. My apologies. And now they got to what? FOILED. SO NOW THEY GOT TO GO AHEAD. I'M SORRY. NO, YOU FINISH YOUR THOUGHT, RICHARD, ON MY APOLOGIES. AND NOW THEY GOT

TO WHAT? WELL, NOW THEY'RE GOING TO HAVE TO ACTUALLY DO WORK. I MEAN, YOU GOT SOME GREAT INVESTORS THAT COME ON HERE, AT LEAST ONE OF THE GREAT INVESTORS. BUT THERE ARE A LOT OF PEOPLE WHO LITERALLY GOING BACK ALMOST 15 YEARS IN THEIR

30S WHO HAVE NEVER EXPERIENCED ANY REAL TURBULENCE IN A MARKETPLACE, HAVE NEVER SEEN REAL INFLATION, HAVE NEVER DEALT in their 30s who have never experienced any real turbulence in the marketplace, have never seen real inflation, have never dealt with the problem that money that costs something is the way you discount the present value of future cash flows. So I do worry about that. And I think that's why we're having this enormous, you mentioned earlier, the VIX at 30 is still incredibly volatile. The fixed income markets have been quite volatile until the last week where they've settled in a little bit. No one's used to that. Mistakes are going to be made. People are afraid. Put me in the room,

if you could, Richard. What does the Fed think of the market decline that we've had thus far? Are they content? Do they want more? What do they make of it? How are they talking about it? I wouldn't say content. I would say they're noticing. But I would say the key is here, are their credit markets still in good shape? And is the banking system being threatened? That's the key motivator for policy in terms of the non-pure economic factors. And I do remember, Scott, when Jerome Powell, Jay Powell, first joined the committee, it was June of 2012, all the way up to the taper tantrum, he was warning the chair and warning the committee that if they kept down this path, which we were on back

then, with QE and zero-cost money, there would be a significant stock market reaction and more volatility. And I think he quoted Margaret Thatcher, which is, don't go whopping. You're going to have to just eat it. So we underwrote a huge rally starting when the S&P bottomed at 666, the Book of Revelations moment in February, early March, first week of March 2009. And we've been on pretty much a ride ever since. And he was warning the committee then as a new, that this was going to result in tears. And I think I know he, and I think the committee now, understands there's a price to pay. The key is, does it destabilize the economy? Does it destabilize the credit markets? And you cannot say right now that it has. So as long as credit doesn't freeze up, the Fed is, in quotes, OK with the market declining

like it has and potentially even further if that's what helps it do the job that it needs to do. Well, that's my view, and I think that's correct. OK. And lastly, before I run, the CPI today, I'm curious as to how you think that plays into any chance of an intermeeting move by the Fed and whether you think that one is needed. I'm not sure one is needed, but I do think it stiffens our spine. We all know, given the fact that rent is imputed and is way undervaluing the cost of rental housing, that inflation is running at 10 percent. You have to add at least 1.7 more to the number that was reported. This is frightful. They have to deal with it. That's their job.

And I don't think it calls for an intermeeting session, but it could. But at the same time, you have to be mindful if you're on a committee, you don't want to scare people that things are even worse than they are. So this will probably be discussed. I would not expect them to have one, but I would rule it out. Richard, I appreciate the time as always. That's Richard Fisher, the former Dallas Fed president. I'll see you soon. Thanks. Up next, we're tracking the biggest movers in the OT.

Beyond Meat out with results just a few moments ago. The stock is plunging. We'll talk about what's driving that move. We have more on Disney coming up as well. We're back after this. All right, Beyond Meat earnings are out. Kate Rogers has those numbers. We mentioned the stock, Kate, is plunging. What's going on? Yeah, Scott, to a miss on the top and bottom lines here for Beyond for the quarter. Wider loss than expected at a loss of $1.58 adjusted per share compared to estimates of $1.01. Revenues also lower than expected, $109.5 million for the quarter, below estimates of $112.3 million.

U.S. retail, or its grocery volume, increased 11.9 percent. The company noted that beyond meat jerky, its partnership with Pepsi partially offset revenue decreases in other products in U.S. retail. we're making today in support of our long-run ambition have contributed to challenging near-term results, including a sizable though temporary reduction in gross margin as we took cost-intensive measures to support important strategic launches. We are confident in the future we're building. In terms of guidance for the year, net revenues are expected to be in the range of $560 million to $620 million. That's an increase of 21 to 33 percent rather compared to 2021. Just about in line with what they had projected. The stock down right now more than 20 percent. Also hit a new 52 week low today. It's down about 70 percent over the last six months. Scott, back over to you. Yep. Kate Rogers, thank you very much for the update there. Up next, we continue to watch shares of Disney. The company's earnings call is underway. Been going on for about 17 minutes or so.

We have more reaction to that quarter from a shareholder. We'll do it next. Told you Disney shares on the move in the OT after the company reported a beat on Disney Plus subscribers. The key metric stock come down a little bit from its best levels as the conference call is now underway. Let's bring in Decatur Capital Management's Degas Wright. He owns that stock. And, Degas, you told me on the halftime report today that you were reevaluating the position. You wanted to see what they delivered.

Now what do you see and what do you think? Well, Scott, I'm real pleased with what I'm seeing here because if you look at subscriptions, they are winning the subscription war because they have quality family content, they have live sports streaming, and their subscription fees are lower than Netflix. As we look at the earnings, once again, they surprised on the upside, and also in revenues, they surprised. When you go to the parks, they came in at about $6.6 billion compared to $6.3 estimate because of greater spend by customers at the parks. This was exactly what I was looking for. So you're not going anywhere with the stock. Would you, I mean, look, the stock was what, was it $200? What would make you add to it? It was, yes.

At this point, we are not adding to this name, but we're still going to hold it and continue to reevaluate it as we get more information. All right, that's Degas Wright joining us from Decatur. Update on what he thinks about Disney in that quarter, again, beating on the subs, and that may be the biggest and most important number of all. Up next, we're tracking some other big movers in the OT. A full rundown is ahead. Plus, Santoli's last word. We're back right after this.

Tracking some big stock movers in the OT. Christina Partsanovalos is here with that. Hi, Christina. Hi. Well, popular dating app Bumble, where women make the first move, post a Q1 total revenue of $211.2 million. A beat. Shares are soaring right now in the OT, up above 11%. And that's because 3 million people are actually now paying to use the app, but that number was slightly less than what the street was expecting. Total average revenue per person, so those people are paying $22.76, up from $19.99.

I guess you can't put a price on love, right? Sonos, known for its fancy speakers. A lot of men seem to like it. Posted Q2 revenue just shy of $400 million. A slight beat, but earnings fell short by a penny. Gross margins, though. They also decreased by 500 basis points, and the company reduced its gross margin guidance

while maintaining full-year revenue. The stock, though, surging up over 14 percent, Scott. All right, Christina, thank you so much, Christina Partsanova. Santoli's last word is coming up next. To the results of our Twitter question of the day, we asked you which of these big cap tech stocks looks most attractive today? 41% of you say Apple. That was the winner. Apple closed below 150. Again, Santoli's here with his last word.

I don't know if it's about mega caps or not, but it's getting pretty ugly there. It is. In fact, the last word is bear, and specifically this whole characterization of this current market as a bear market, which I certainly don't dispute. I'm not squeamish about calling it a bear market. I do question what it gets you to know that, right? Because at this very point, you had the 200-day moving averages going down. Most stocks are down more than 20%,

even if the index isn't. You obviously have fleeting rallies and persistent downturns. The overshoots are happening to the downside. That's a bear market. We were also here at the end of 2018 and in February of 2016. All those conditions applied at that point, too. And almost by the time you started to call it a bear market, it was over. Now, also the case 2000, we were only part

of the way there. It was a two and a half, three year bear market. So my point is you have to look at it in stages, day to day valuations. What's actually being priced into the market? What's not? What's the policy response going to be as opposed to just it's a bear market, therefore get out and stay out. That's probably not the way to think about it. The conditions at those other times as it relates to the Fed were different, obviously, right? The Fed right now is on and is in a new regime.

There's no doubt about it. But in early 2016, you would have said it's a deflationary panic, global recession, credit spreads are blowing out, Brexit vote coming up, presidential. There's always a reason why a bad market still feels like it's justified and continuing to go down. I thought it was interesting, too, what Richard Fisher says, and we don't have much time to chat this. But as long as credit wasn't seizing up, that the Fed was more or less OK with the fact that you've had a market the way you have now. That is definitely the primary indicator. We'll see. All right. That's Mike Santoli with his last word as usual. It does it for us. I'll see you tomorrow.