Closing Bell - Closing Bell Overtime: Micron Earnings and the Revival of the Year-End Rally 12/21/22

Episode Date: December 21, 2022

Stocks climbed for a second day today, only the second time the S&P 500 and Nasdaq have seen back-to-back gains this month. Ritholtz Wealth Management’s Josh Brown, SoFi’s Liz Young and Key Financial’s Patti Brennan unpack whether a year-end rally is back in play. Plus, instant reaction to Micron falling after announcing a 10% headcount reduction for 2023 in its earnings report. And, JPMorgan’s Chair of Global Research Joyce Chang reveals where she sees the most opportunity abroad.

Welcome to Overtime. I'm Mike Santoli in for Scott Wachter. You just heard the bells, but we're just getting started from Post 9 at the New York Stock Exchange. And we have a busy hour ahead. Micron earnings are about to hit the tape. We're bringing the breaking numbers and instant stock reaction as soon as those results cross. Plus, President Biden and Ukrainian President Volodymyr Zelensky are about to kick off a joint news conference in Washington. We'll take you live to the White House the moment it begins. But we start with our talk of the tape.

Stocks rallying today with all three major averages gaining more than 1%. It is just the second time this month the S&P 500 has posted back-to-back days of gains. So as we close in on the final trading days of the year, more green hours ahead for your money. Let's talk to CNBC contributor and Ritholtz Wealth Management CEO Josh Brown about that. Josh, look, this year has taught us not necessarily to look at every 1% bounce and say that the trend has changed. We're only bouncing off the down 20% level of the S&P 500. But, you know, if the year ended today, what are you telling folks? What have we learned? And what do you expect to continue or be different about 2023? The number one thing from our perspective is don't change the rules during the course of the game.

And, you know, we've talked before about the difference between gut instinct based investing versus rules based investing. And there are people who are really good at gut instinct. So I don't mean to take anything away from that crowd. I am not. I learned that already in my 20s. So I don't need to relearn that in my 40s. Rules based investing puts you in a box, but in all the best possible ways. And I think a lot of people were successful this year. They might not be green on the year, but they're not down the 19% the S&P is or even the 14% that a 60-40 portfolio is because they utilized rules that keep them from being fully invested into a downtrend. For example, in our case. And other people have different strategies.

But the worst thing you could have done this year was say, oh no, this rule doesn't apply because blank. Russia invaded Ukraine, or once in a lifetime inflation spike, or excess liquidity, or whatever like economic thing you follow. Like to me, when I, and I hear stories all day from pros,

who got wrecked, who's doing great, et cetera. One of the consistent themes of the people that are fine coming out of the year and ready to rock next year are the people that stuck to what they already know works despite all of the superlatives and wacky stuff going on in the markets. Yeah, I mean, that absolutely makes sense.

And by the way, we do have micro numbers coming in. We're going to get to those in a second. But Josh, you know, when we're talking about the more immediate setup right here, not all the rules can be right, so to speak. Right. Inverted yield curve the way it is right now means recession is coming. On the other hand, high and declining inflation and midterm election years, the year after one, they're always positive. Right. And the market doesn't bottom before recession starts. So in other words, you have all these conflicting supposed rules of thumb. We've been living with recession fears and inflation threat for months on end.

Where does it leave us here? S&P just under thirty nine hundred. All of those rules are so tough. I'll give you another one. I was talking to Tom Lee about this yesterday. Earnings usually bottom 11 months after the stock market. So you hear a lot of people come on CNBC and they're like, oh, the earnings are going to be the big story. Okay, but it's going to be like a year before they bottom and stocks will probably not wait for that. So here's a big rule of thumb, not really a rule of thumb,

but just like a truism. And I know you know this, but for our audience, especially our younger audience, a lot of conversation that we have is about this number came out good, this number came out bad, earnings are going to be bad, inflation falling is going to be good. First of all, if you get shocked by a recession next year, I'm going to go ahead and assume that you've spent most of 2022

living in a cave. And the big thing is expectations. So we don't care about what's good, what's bad. All that matters is, is it better than feared or expected or worse than feared or expected? And so that's where we have room. Go ahead. Do you think? That's a perfect spot to get into Micron right here because there were a lot of fears around Micron. We want to find out how they came in. Christina Partsinevos has the numbers for us.

Well, fears. I guess we should fear this because the earnings came in worse than expected. You had a bigger loss of $0.04 a share versus the street estimate at the street estimate of one cents a share, three cent difference on a major deal. And then you had revenues that did miss, too, at four point zero nine billion. The estimate, again, it was a small miss at four point eleven billion. So that was the estimate. They're also the company sees Q2 loss of sixty two cents adjusted versus the 30 cents. And then there's an interesting quote that we're also getting from the company, I should say, and I'm just going to read it to you. Micron's strong technology, manufacturing, and financial position puts us on solid footing to navigate the near-term environment. And we are taking decisive actions to cut our supply and expenses. That was

the key because we were looking to find out if they were going to be cutting CapEx. We expect improving customer inventories to enable higher revenue. So that was the big point that we're looking for is what are they going to cut. So I'll continue to go through the numbers just to make sure about the CapEx. But that was something we were looking for with this report. Guys. Christina, thank you very much. Yeah, so the guidance substantially below what was already out there for second quarter guidance.

The stock tried to rally. It's still kind of hovering around the flat line. Clearly, people were not expecting outright good news from this one in particular. And, Josh, I mean, just at first blush, big picture. This was a company that for fiscal 2023 on June 30th was supposed to earn $11 a share. That estimate's now zero. So it shows you this is a very, very leveraged company to the memory chip cycle. But how to think about it at this point? Yeah, I think the main way to think about this and a lot of companies that make up

things like the Semiconductors Index is that they're in the caboose. They're not driving the train. So yes, their guidance might be important to their own stock, but they will be the last to see a slowdown coming. And they will be the last to feel it when things start to turn around. The amount of lead time that Micron has is very different than what you're going to see at the OEMs, for example. And I think we make this mistake a lot of the time. We look at all of these companies reporting and giving guidance as though they're offering

some sort of signal or something emblematic for everyone else, and it just doesn't work that way. So these guys are a component supplier. They have an outlook on the environment, but they really can't tell you where the leading edge is. I do think it was encouraging to hear about the inventory work down being underway, similar to what we heard from Nike last night. The street loved it.

Yeah, for sure. Actually, we're going to get back to Christina Parts and Nevels with a bit more color on this quarter. We were just talking about cutting spending. And in the 8K, just the top of the 8K, the company is saying that under the restructuring plan, we expect to reduce our headcount by approximately 10% over the 2023 calendar year, and they're going to incur charges of at least $30 million

in the second quarter to pay for a lot of those layoffs. So again, they were reducing their headcount by approximately 10% over next year. Guys? All right, Christina, thank you very much. Might be somewhat familiar, people trying to get the cost right after a few pretty fat years for tech. Let's bring in SoFi's Liz Young and Patty Brennan of Key Financial to talk a bit more about these markets here. And Liz, you've been on the cautious side or recommending folks stay pretty cautious. It's been vindicated. Obviously, we're still in a downtrend in this market and a lot of open questions on the macro side.

What are you looking for heading into next year in terms of whether this retrenchment that we're in is culminating and it's time to start adding risk or perhaps going the other direction? Well, I think we're still in the process of finding a bottom, right, finding the end of this. I do expect that it ends next year one way or another in some way, shape or form. I think the good part about this is that we'll probably know by the end of the first quarter if the Fed is done or not. We might even know by the end of February if the Fed is done or not. And then we can sort of get on with our lives or get on with setting expectations for did they orchestrate a soft landing? Can they orchestrate a soft landing?

I think the answer to that is probably no. So what else needs to happen before we find that out for sure is that, yes, earnings probably do need to come down some more. Consensus is for year-over-year growth to be flat. I would expect it to actually end up in a contraction of, say, do need to come down some more. Consensus is for year-over-year growth to be flat. I would expect it to actually end up in a contraction of, say, 5% to 10%. But the other good thing about this entire cycle is that we went into it with such high profit margins and such a tight labor market that even if we do have a recession, it might not end up as bad as prior recessions. We just need to kind of get on with it.

I actually think the biggest risk next year is that it drags on longer without a resolution and we stay in this sort of purgatory state. You know, I was just looking, and this is anecdotal to a degree, but if you say, well, look, the consumer is going to lose some of the spending power and will. You might have some bumpiness in credit. You know, the auto market's not coming back the way it was. I mean, Capital One Financial and Ally Financial, I mean, those are the stocks that would get hurt, right, in that kind of environment. They're down 40, 50 percent, right? You have consumer discretionary equal weighted is down 25 percent. I guess the point is, how much has the market already figured out about where we might be headed? I think it's figured it out in the

financial space. I mean, it doesn't mean that they won't go down a little further if we end up in a consumer driven recession. I mean, obviously, anybody that has a big loan book is going to get hit more in that, or a credit card business is going to get hit. One thing that I think is important to point out, so consumer confidence came out today, and it surprised on the upside, and I think that's part of this rally. People were worried that the consumer would start to get hit. They saw that number and said, oh, everything's fine. That number is, it's a survey, right? People answer questions. If you look at what happened, like don't have a short memory. Look at what happened last week. We got a retail sales number that was the lowest

it's been in almost a year. I'm much more interested in what consumers are doing and less interested in what they're saying. So retail sales are telling us that maybe the consumer is being hit. And once the labor market shows actual signs of weakness, which I would expect it will start to if we continue to get layoff announcements like this, consumers will pull back. And that's where things start to really get real. For sure. And Patty, you know, investors are kind of surveying things right now

and saying, you know, I lost in equities. I mean, bear markets happen. But I also lost in bonds alongside it, if you're marking a market, although bonds have done better lately. What does that leave you with in terms of what to do, if anything, right now to make sure that you're prepared for whatever next year might bring? Well, I think this is a perfect example of how confused investors really are. There's so much conflicting data and interpretations of what that data actually means. As Liz just pointed out, consumer confidence came in higher than anybody expected.

And yet when you look at Michigan's sentiment, it tells a very different story. So which one should we actually believe? As I go through and I think about 2023, I am reasonably optimistic, but also I have a healthy degree of paranoia. Things have always happened. They always will. That's the way these things work. Markets are cyclical. And so the most important thing is to hope for the best, expect the unexpected, and be prepared for worst case scenarios. What does being prepared for worst-case scenarios mean in terms of what I hold, what I avoid? What I'm referring to is a durable financial plan that is less macro-focused and more focused on a micro level.

Each investor has their own set of criteria, their own needs, cash flow, tolerance, things of that nature. From a sector perspective, you know, I don't know whether or not we're gonna actually have a recession. Consensus seems to suggest that we are, which pretty much is a self-fulfilling prophecy.

Okay, so we have a recession. Let's build a plan that is resilient in good environments and not so good environments. And by that, I mean investments that might include some of those durable areas, things like, you know, food, energy, utilities, et cetera. Got it. So sort of real necessities and not luxuries and virtual goods. I think that's been one of the themes. And, you know, Josh, I feel like there's a bit of a consensus gathering as we get to the end of the year that bonds can actually work, whether in fact we have a recession or not. That, you know, there's enough of a cushion in yields right now that somehow we're not necessarily going to have a solvency crisis in the economy.

And if we get a recession, bonds act as a hedge by yields going down. If you don't get a recession, they'll hold up. Can it be as easy as that, do you think, on the fixed income side? Well, if you look at all the different maturities, the 4% are rapidly disappearing. They're being taken away. Where are they going? People that have that same instinct as what you're talking about are loading up on bills, on two-year bonds,

five-year bonds. So that might have been a once in a long time opportunity, unless there's some sort of re-acceleration of inflation. There are almost no formulas in finance that are 100% or can be guaranteed. And this one can't be either, but it's the closest one I've ever seen to perfection, which is that if you want to know what your return will be on a 10-year treasury, start with today's yield.

And when 10 years elapse, you can almost set your watch by it. I think there's like a 99% historical degree of confidence that that will actually end up being your average annual return over that period. So if I tell you anytime you see a 10 year somewhere between three and a half and four, grab it. Take my word for it. It's not my opinion i'm i'm telling you that that is probably if you're a rich person in america that is probably going to be a pretty good 10 year rate to sleep at night and have no risk on but i would barbell that can i can i have one chart

and then i'm going to shut up um can we all turn our attention to m's? Can we look at like, I don't know, a five-year or... This is the type of stock that I think works into next year. I would say this is the best chart in the market right now that hasn't yet broken out. There's a lot of breakouts, energy, blah, blah, blah. What is it about McDonald's? This is the type of company that we talked about at the top of the show. It's the pricing power. People don't really change their behavior all that much from a recession to an expansion.

The amount of McDonald's a McDonald's customer is going to eat really doesn't vary. And you can see the resilience in this stock and their ability. They are now inheriting the customers who are trading down from God knows where. I don't know this stuff. PF Chang's, I guess. Like they're going to get the benefit of people trading down, plus you've got this tenacity of customer spend. So these are the types of stocks that you would pair with bonds,

and that's how you get through 2023. Yeah. Looks a heck of a lot like a bond with, I guess, a few different dynamics, but maybe maybe could be one of those resilient components we're talking about. Josh, Liz, Patty, thanks very much. Appreciate the time today. Thank you. All right. We do have breaking news on Under Armour. Let's get to Sarah Eisen on the CNBC Newsline. Hello, Sarah. Hi, Mike. Under Armour is naming a new permanent CEO. So here's the news. Stephanie Lennartz will become the new CEO of Under Armour February 27th. She is currently the president of Marriott International. She's basically the number two to Tony Capuiano, the CEO, where she has been for 25

years. Now, as part of this shakeup, Colin Brown, who our audience knows, he's been on the show, he's been the interim CEO of Under Armour since June, he was in the running to be CEO. He will go back to his previous role as COO of Under Armour. I did speak with Kevin Plank, who is the founder and previous CEO. Here's what he told me. He said, as far as the CEO process, it was a full process. He said they started out with 60 candidates. It began as early as May. They worked it down to the top 20 and then the top six before hiring Stephanie. He framed this decision of why Stephanie around three priorities that he's thinking about for Under Armour. Priorities, he says, after having spent the last five to six years really in a transition period.

He said now is the time to push forward. And those three things are digitization, product, and brand. The digital piece here is a big appeal because Stephanie led, helped build, and currently leads Marriott's Bonvoy loyalty program for over 173 million members. Plank says he wants some of that secret sauce. And then on the brand, which investors certainly have said that Under Armour secret sauce. And then on the brand, which investors certainly have said that Under Armour needs to do more work on to refresh, Plank emphasized that Stephanie has worked with more than 30 brands and gets at strong brands like the Ritz-Carlton. Now, I did ask Plank about her lack of specific retail experience, and he pointed to her six years as

being a board member of Home Depot, board director. So she's got retail shops there as well. Now, of course, I also asked about Kevin Plank's own role, which investors are always wondering about, because it's been sort of mixed as CEO. He's the founder of the company. Here's what he told me on that. He said, my title is brand chief and executive chairman. It will be a partnership. She and I will be partners. We're not hiding from that, he said. I will be involved in the business in an important way. And then the other point here to emphasize why this was such a good fit for Under Armour that Plank said is that she's worked in a founder-led organization like Marriott. Of course, under Bill Marriott, there's an immediate synergy here with Under Armour and Plank. He said that innkeeper's mentality. So the big news is that they are hiring externally a new CEO, Stephanie Lenartz from Marriott, Mike, which investors were

looking for that kind of clarity before the end of the year. The company promised it and they are delivering on that. The question is, can they change the narrative of the stock into a growth mode and a recovery company into next year? Yeah. And Sarah, the stock did have gotten just a little bit of a bump after hours. It seems like settling on a new CEO, perhaps, you know, the fact that it is an outsider with this perspective, you mentioned the direct to consumer experience, as well as some exposure to retail there. I mean, I guess you have all those broad priorities, maybe in a more immediate basis. What's the todo list that's going to greet her in the job? For Under Armour's growth, you know, they've been fairly disciplined on the inventory

and have not suffered as much as, say, a Nike. And while I know we reported on those earnings and you covered that yesterday, that the inventory problem is starting to clear, Under Armour's been in a better spot for that. They just have not grown. The previous CEO, Patrick Fritz, was able to help optimize the business. In other words, focus it down to prioritize profitability. And that's something that he was able to do, expand margins. The key is figuring out that Under Armour brand, where they play, and getting more shelf space and getting them back on a growth trajectory, which is where they were for several years under Kevin Plank initially. So that's going to be the big thing. And it's going to be,

as you know, to grow in a tough consumer discretionary environment where people are worried about recession and pullbacks, where apparel is more promotional, and where companies and brands need to make a decision about whether they're going to maintain brand strength and not take markdowns on the product or whether they're going to mark them down, which Under Armour has traditionally done. So it's those kind of decisions about how to grow a retail brand that has struggled over the past few years but now has stabilized. And that stabilization, and Plank emphasizes to me, came under Colin Brown, but to take it really to the next level

and to get Under Armour there. Plank said, direct quote, growth is not where we want it to be, and that's going to be what her focus is, figuring out the brand, where it sits in the retail universe, where they play, and focusing on the athlete first, right? Because that's where Under Armour distinguishes itself, from Adidas and Nike, and then figuring out how to bring the brand heat again to an Under Armour. Right. Yeah. Well, it's a growing category as they play in and a much bigger

competitor. So in theory, there's room there for market share gain. Sarah, I appreciate it. Thanks a lot for bringing that to us. Talk to you soon. No problem. I'll see you Friday, Mike. Thank you. Absolutely. All right. Let's now get to our Twitter question of the day. We want to know what is the best chip play right now? Micron, NVIDIA, Intel or on semi? Head to at CNBC Overtime on Twitter to vote. We'll share the results later in the hour. We're just getting started here in overtime. Up next, we're going global. J.P. Morgan's Joyce Chang lays out her top international plays for the new year, where she sees the biggest upside opportunity for your money overseas.

We are live from the New York Stock Exchange. Overtime will be right back. We are back in Overtime. Stocks finishing in the green today with all three major averages up better than 1%. But our next guest is calling for a pretty sharp downturn, maybe come early next year. Let's bring in Joyce Chang, J.P. Morgan Chair of Global Research. Joyce, good to have you here. Great to be here in person. Yeah, it's a treat. So you think there's some unfinished business here in terms of potential testing and downside into next year for the market?

Yeah, the one thing I would just say is that we're headed for a year that's not going to be linear. So, I mean, look, we're not in a global recession or a U.S. recession eminently, but there's still more work to be done. We still need to see services inflation come down and the labor market conditions are very tight right now. And we've had some pretty rapid market moves here. So I just would not be surprised if you see us testing the lows that we had this year sometime in the first half of 2023. OK. And so for context, that's a 10-ish, a little more than that percent drop from here would be in the S&P 500. What does that mean in terms of positioning either here, globally, between asset classes, things like that?

Well, look, I think one other theme that we're looking at, there's non-linearity, but there is also more convergence with international. So some of the international markets are more interesting right now. I mean, we do have earnings. We've taken down EPS to 205 for the S&P. So if you actually, but still, even with that, you're going to be about 20% above where we were before the pandemic. Now, if you look at the international stock markets, I mean, you're really seeing valuations that still look a lot more attractive. And so we've had some contrarian calls, like a call on the UK, which we still keep into 2023. We like that more than continental Europe. But there's also some opportunities in emerging markets. Some of that's already played out. Like we've seen China recovering very strongly the last

couple of weeks. When you talk about it as convergence, I mean, I assume you mean that U.S. has outperformed a lot. U.S. is more expensive and therefore valuation convergence works to the benefit of overseas markets. Absolutely. I think there is more international convergence that can play out here just given the absolute levels we're at and that U.S. earnings are going to have to come down here. You mentioned services inflation still needs to come down, tight labor market in the U.S. Did those things imply that the Fed is going to surprise on the tighter side or is it pretty much the market have it right in terms of where the Fed lands? Look, I think it's another 50 basis points, 225 basis point moves. But I don't think it's just what the Fed is doing. It's that

the market is assuming a pivot earlier than I think will occur. And I do think it's more of a high hold that's going to be here. And then you're going to just see the weight of 500 basis points the Fed tightening way in the market in 2023 as growth is coming down, as earning revisions are coming down as well. So I think that everyone thinks, oh, when the Fed pauses, the next thing is an ease. But you could have a high hold where really they don't do anything until 2024 even. Sure. And in terms of, you know, the overseas play, is that mostly a function of those economies being resilient or just cheaper stocks or just even the value mix of their sectors? Well, I mean, it's a combination of different things. So,

you know, growth is going to come down in the U.S. The Europe is going through a milder recession than people had thought and is going to stabilize here. But even China, with the reopening trade, after really having a collapse in the economy in the last couple of quarters is going to come back. So you're going to see some growth rotation as well. But there's a couple of sectors that we're more cautious on right now, like energy, which we've been very bullish on over the last year. We think tactically it's more, you know, one to be a little bit more cautious on given the run that we've had, even though we like it over the longer term and as a structural play. But I think that, you know, China has, you know, rallied back very strongly since November. So I'm not so sure you should chase that one. There are other emerging markets that actually stand out and we think have some attractive value right now. Interesting. So energy, even with China,

perhaps reopening further, you think that just it's gotten a little bit ahead of itself? I think it's probably gotten a little bit ahead of itself. I mean, medium term, we still like the trade very much. And we think that even on positioning, this is one where there's still further upside. But, you know, we probably pull back over like the next quarter on that one. You know, but if we take a look at some of the emerging markets, some of the green energy plays actually make a lot of sense rather than the traditional energy plays. What's the connection there between emerging markets and the green energy plays?

Well I think that it depends on which market, but in the Asia markets we definitely see in China, even as we look at like electric vehicles in South Korea when you have memory sort of coming back, and also Indonesia. So we actually see that in Asia, some of the green energy plays make sense just because of the emphasis that's being put in the specific countries on those particularly markets and also the valuations.

But there are other markets outside of Asia in emerging markets that we see as attractive as well, like Brazil. Brazil, I think, is gonna be one of the first central markets that we see as attractive as well, like Brazil. Brazil, I think, is going to be one of the first central banks that can ease. And there is still some stimulus that is going into place there. So I think emerging markets have some attractive opportunities here as well as part of this international convergence play. I know you pay attention to sort of the volatility set up, the structure in general. We've had a pretty little bit of a, you know,

receding volatility levels. It's the end of the year. VIX around 20. Does that mean it's going to be calm sailing into next year or is that something not to back up? I would just say non-linearity again. I mean, I think that the VIX is, you know, more like 25 is going to average over the next year.

But we've also seen, you know, rates move quite a lot over the last couple of days. And we've seen treasury yields, 25 basis points, just off of the post-FOMC lows that we had. And I think that rates volatility with the surprise out of Bank of Japan is going to stay with us as well. So I think there's low liquidity into the end of the year, which is what we always see. And this could actually be tilting more favorably. But, you know, we've seen

these pullbacks, which I don't think we're over with at this stage. Yeah. Bond volatility really has been the lead story of the year, whether we talk about it much or not. Joyce, great to talk to you. Thank you. Great to be with you. Happy holidays. All right. You as well. Thanks. Thank you. Time now for a CNBC News update with Bertha Coombs. Hey, Bertha. Hey, thanks very much, Mike. Here's what's happening at this hour. President Biden tells Ukrainian President Zelensky, it's an honor to be by your side. Biden also pledging to maintain support for Ukraine, including advanced weapons like Patriot missiles. Zelensky expressed gratitude for America's help. All the great from our nation, strong nation, all the appreciation. Thanks Congress and thanks from our just ordinary people to your ordinary people, Americans.

I really appreciate. Holiday travel in the Midwest is already getting hit by the winter storm threatening much of the country. 30 percent of flights out of Minneapolis, St. Paul, International are delayed. Blizzard warnings have been issued for parts of Minnesota, Iowa and Michigan. And the suspect in a shooting attack on the New York City subway will plead guilty to federal terrorism charges. Frank James is accused of firing dozens of bullets in a crowded subway car injuring 23 people last April. Mike, back over to you. Bertha, thank you very much. Up next, more on Micron, the stock lower after reporting moments ago. Companies call just

getting underway. We have a top analyst standing by with his instant reaction to the quarter. Overtime will be right back. Plus, you're looking live at the White House where President Biden and Ukrainian President Volodymyr Zelensky are about to kick off a news conference. We'll bring it to you live the moment it begins. Overtime will be right back. Let's take another look at Micron. Those shares are lower, a little less than 1% in OTA after a revenue miss and some weak guidance. The earnings call just getting underway for instant reaction to those results. Let's bring in Matt Bryson of Wedbush. Matt, you know, the company and the street has been sort of chasing the results lower here. I mean, estimates cut, guidance cut, still further down beyond what we were expecting in today's report. Do you think it's settling out at something close to a low in terms of the actual business performance and conditions yet?

So memory is still tough. I think that Q1 may mark a bottom. There's some sentiment that if the Chinese New Year is disappointing in terms of holiday sales, that you'll see some product, some excess product again available. And that may be when pricing actually bottoms. But we're still looking for signs of a turnaround. And the guidance that they gave today, the cost-cutting measures, does it change the story at all? Has the stock de-risked, I guess, in street parlance enough for it to be a little safer? Yeah, so I think the expectations were already low, right? They told us that pricing was worse than they anticipated, and my checks show that pricing continues to move lower.

I think that was reflected in expectations. With Micron, historically, the bottom's been about book value, value's in the mid-40s at this point. Certainly, you can make the argument that Micron's a much better company than it was four, five, six years ago. The cost leaders in DRAM, they've got a great NAND product, which historically wasn't the case. They have a better balance sheet. So I think that the stock is close to a bottom. It's more of a question of when's the upside going to occur? When are we going to see a shift in this memory cycle? And is there any relevant read

through from what Micron has told us to other players in memory or more broadly in the semis? So I think the read through is effectively that things aren't getting better yet. Certainly, memory has its own issues in that there are these large inventories of customers. Those inventories, particularly in the data center space, they need to get worked out. It makes it hard to tell what end demand is. I think generally for semis, you've got two factors in play. One, these inventory work downs. Two, the lack of demand or demand recovery in some cases, demand getting worse. I think those factors that are weighing on micron, they're also weighing on the broad

semiconductor complex and what micron tells you is, at least right now, memory is not seeing reversal. And I think in general, semis are in the same boat. And so where would you prefer to look if you wanted to say, look, maybe there's a way either to get shelter from this weak part of the cycle or to anticipate when it turns better? How is your what are your preferred ways of doing that within the group? Yeah. So, Mike, I actually think Micron's a good place to be in that it's one of the names you can point to where you do have this valuation bottom that's not related to the cycle, right? Again, book values in the mid-40s, historically, that's where it bottomed. So you just don't have a lot of downside.

The other names that I tend to focus on are names that I think are gaining share. So AMD, I think certainly they are going to take share throughout 2023, 2024 in the server CPU space. So even if you have a difficult end market, they can outperform if they can take an incremental share. And the same thing with Taiwan Semi. So in part, it's the share losses by Intel.

So Intel losing share to AMD, that accrues to Taiwan Semi via AMD. But also, same thing with Apple. Apple can shift to their own processors. Again, that share accru taiwan semi but then also you've got uh qualcomm nvidia shifting uh some of their production uh over to tsm and so again i i think they're in a good position because they're they're taking some share that that offsets some of the broader market weakness matt appreciate the time today thanks very much matt all right let's take another live look at the White House where President Biden and Ukrainian President Zelensky are about to kick off a joint news conference.

We'll bring you live the moment it begins. Overtime will be right back. President Biden meeting with Ukrainian President Zelensky in his first known trip outside Ukraine since the Russian invasion. The two leaders are about to hold a joint news conference. Kayla Tausche is at the White House with the latest. Hi, Kayla. Hi, Mike. We are watching the East Room here at the White House fill in with media and officials as we await that press conference following a meeting between Presidents Biden, Zelensky, the Ukrainian delegation, and the U.S. national security team. They were talking about the war 10 months in, talking about diplomacy, according to senior administration officials, though the U.S.'s position remains and has long been that it's up to Ukraine to figure out exactly what the term just peace means and how it wants to end the war in its country.

Certainly, the West has been very quick to put on the table many financial penalties for Russia, but many of those have come up short 10 months. And the ruble has strengthened, the oil continues flowing, and the war at 300 days inside Ukraine continues. So now the conversation returns to military might. What weaponry the West can be providing President Zelensky and his military to help them continue fighting the war and stack them up against

their opponents. Today, the Pentagon announced a billion dollar drawdown for Patriot missile defense systems, ramping up Ukraine's capability to attack Russian missiles and drones as Putin increasingly takes this fight to the skies. Certainly that is taking the war in a new direction. Russia has accused the U.S. of a potential escalation on that front but it will still be several weeks before we see those weapons in action. We are hearing the president being announced right now. Let's turn now to the East Room at the White House.

We spent an awful lot of time on the telephone as well as on video, but it's good to see you in person again. And we've been in close and frequent communication throughout this conflict from the very beginning, but it's particularly meaningful to talk with another in person, look each other in the eye. Because leadership through this terrible crisis has inspired the Ukrainian people, as you have done, Mr. President, and the American people and the entire world. This visit to Washington, your first trip outside Ukraine since February, comes as President Putin is escalating his attacks, his brutal attacks, targeting critical

infrastructure to make life as hard as possible for not only innocent Ukrainians, but children and young children and everything from orphanages to schools. It's just outrageous what he's doing. And we've, as we've heard into the, as we head into the new year, it's important for the American people and for the world to hear directly from you, Mr. President, about Ukraine's fight and the need to continue to stand together through 2023. This visit also falls on the 300-day mark of Russia's brutal invasion of Ukraine. 300 days since Putin launched an unprovoked, unjustified, all-out assault on the free people of Ukraine. 300 days of Ukrainian people showing Russia and the world their steel backbone,

their love of country, and their unbreakable determination, and I emphasize unbreakable determination, to choose their own path. To Ukrainian people, I say to them all, you have demonstrated, you have shown your strong stand against aggression in the face of the imperial appetites of autocrats who wrongfully believe you might, you might, they might be able to make might right, and they're not able to do it. Thus far, they've not, they've stood alone, you know, and you've had, but you haven't stood alone. You have had significant, significant help. We've never stand alone. You will never stand alone. When Ukraine's

freedom was threatened, the American people, like generations of Americans before us, did not hesitate. The support from all across this country, Americans of every walk of life, Democrats and Republicans alike, had the resources to rebound in a resounding, united way to provide unequivocal and unbending support for Ukraine. Because we understand in our bones that Ukraine's fight is part of something much bigger. The American people know that if we stand by in the face of such blatant attacks

on liberty and democracy, and the core principles of sovereignty and territorial integrity, the world would surely face worse consequences. As I said, when Putin rolled his tanks into Ukraine in February, American people are prepared to have us stand up to bullies, stand up for freedom. That's who we are as Americans, and that's exactly what we've done. Even before the invasion began and Putin threatened Ukraine by building up his forces, we helped make sure Ukraine would be prepared to defend itself, even before they crossed into Ukraine.

We provided a steady stream of defensive weapons, including air defense systems and artillery, ammunition, and so much more. And we've not done it alone. From the very beginning, the United States rallied allies and partners from around the world to stand strong with Ukraine and impose unprecedented, and I emphasize unprecedented, sanctions and export controls on Russia, making it harder for the Kremlin to wage this brutal war. More than 50 nations have committed nearly 2,000 tanks and other armored vehicles, more than 800 artillery systems, more than 2 million rounds of artillery ammunition, and more than 50 advanced multiple rocket launching systems, anti-ship and air defense systems, all to strengthen Ukraine. Together, we provided billions of dollars in direct budgetary support

to make sure the Ukrainian government can keep providing basic fundamental services to the Iranian people, like health care, education, and emergency personnel. This includes another $2 billion in direct budget support from the American people that the World Bank distributed earlier this week. We provided humanitarian assistance to help the millions of Ukrainians who have been forced to flee their homes because of Putin's inhumane, brutal war. Communities across Europe have opened their hearts and their homes to help Ukrainians in need. The United States has been proud to welcome more than 221,000 Ukrainians seeking refuge since March of 2022, including as part of our Uniting for Ukraine program. And today, USAID is committing more than $374 million

in urgently needed humanitarian assistance for Ukraine. This will help provide food and cash assistance for more than 1.5 million Ukrainian people, as well as access to health care, safe drinking water, and help stay warm in the winter for more than 2.5 million Ukrainians. The United States and our allies and partners around the world have delivered a broad range of assistance at historic speed and has been critical to bolstering Ukraine's success thus far. Ukraine has won the Battle of Kiev, has won the Battle of Kherson, has won the battle of Kharkiv. Ukraine has defied Russia's expectations at every single turn. And President Zelensky, you have made it clear that he is open to pursuing.

Well, let me put it this way. He's not open, but you're open to pursuing – well, let me put it this way. He's not open, but you're open to pursuing peace. You're open to pursuing a just peace. We also know that Putin has no intention, no intention of stopping this cruel war. And the United States is committed to ensuring that the brave Ukrainian people can continue, continue to defend their country against Russian aggressions as long as it takes. And I want to thank the members of Congress for their broad bipartisan support to Ukraine. And I look forward to signing the omnibus bill soon, which includes $45 billion in additional funding

for Ukraine. I'll also sign into law the National Defense Authorization Act, which includes authorities to make it easier for the Department of Defense to procure critical munitions and defense materials for Ukraine and other key materials to strengthen our national security. Today, I'm announcing the next tranche of our security assistance to Ukraine. $1.85 billion package of security assistance includes both direct transfers of equipment that Ukraine needs, as well as contracts to supply ammunition Ukraine will need in the months ahead for its artillery, its tanks, and its rocket launchers. Critically, in addition to these new capabilities, like precision aerial munitions,

the package will include a Patriot missile battery, and one which will train Ukrainian forces to operate as part of the ongoing effort to help bolster Ukraine's air defense. This could take some time to complete the necessary training, but the Patriot battery will be another critical asset for Ukraine as it defends itself against Russian aggression. Altogether, today's new security assistance with humanitarian funding amounts to $2.2 billion in additional support for the Ukrainian people. We should be clear about what Russia is

doing. It is purposely attacking Ukraine's critical infrastructure, destroying the systems to provide heat and light to the Ukrainian people during the coldest, darkest part of the year. Russia is using winter as a weapon, freezing people, starving people, cutting them off from one another. It's the latest example of the outrageous atrocities the Russian forces are committing against innocent Ukrainian civilians, children and their families. And the United States is working together with our allies and partners to provide critical equipment to help Ukraine make emergency repairs to their power transmission systems and strengthen the stability of Ukraine's grid in the face of Russia's targeted attacks. We're also working to hold Russia accountable, including efforts in Congress that will make it easier to seek justice for Russia's war crimes in Ukraine. Let me close with this. Tonight is the fourth night of Hanukkah, a time when Jewish people around the world, President Zelensky and many of the families among them, honor the timeless

miracle of a small band of warriors fighting for their values and their freedom against a much larger foe and how they endured and how they overcame. How the flame of faith, with only enough oil for one day, burned brightly for eight days. The story of survival and resilience that reminds us that the coldest days of the year, that light will always prevail over darkness, and hope drives away despair. And that the human spirit is unconquerable as long as there are good people willing to do what is right. This year has brought so much needless suffering and loss to the Ukrainian people. But I want you to know, President Zelensky,

I want you to know that all the people of Ukraine do know as well. The American people have been with you every step of the way, and we will stay with you. We will stay with you for as long as it takes. What you're doing, what you've achieved, it matters not just to Ukraine, but to the entire world. And together, I have no doubt, we'll keep the flame of liberty burning bright and the light will remain and prevail over the darkness. Thank you for being here, Mr. President. We're going to stand with you. Thank you.

Dear Mr. President, Thank you. Dear Mr. President, please put on equipment. Once again, Mr. President, President Biden, audience, journalists, ladies and gentlemen, I came here to the United States to

forward the word of thanks to the people States to forward the word of thanks to the people of America, people who do so much for Ukraine. I am thankful for all of this. This visit to the United States became really a historic one for our relations with the United States and the American leadership.

In the last 30 days of this war, we have started a new phase of our interrelations with the United States. We became real partners and allies with the content. And I felt today during all of my meetings and during our talks. Once again, I would like to thank Mr. President, President Biden, for his candid support and what is very important, the understanding of Ukraine and for the support of the international coalition to strengthen international law. I am grateful to President Biden for his personal efforts, his steps that unite the partners and global south. When all countries of the world take some position and are focusing on cooperation and

mutual understanding. This is very useful for all of the countries, for Ukraine, for the United States. I want to thank the Congress for bipartisan, bicameral support. And I am looking forward to good meetings with the members of the Congress and their support. This is the visit that I am here today to meet with the Congress.

The main issue during my today's talks is to strengthen Ukraine. Next year, our movement forward to fight for our freedom and independence. I have good news returning home. President Biden announced a new package of defense support, about $2 billion. And the strongest element of this package is the Patriot battery systems, something that will strengthen our air defense significantly.

This is a very important step to create secure airspace for Ukraine, and that's the only way we would be able to deprive the terrorist country and their terror attack to strike our energy sector, our people, and our infrastructure. We had a very good negotiation and talks about our strategic steps, which we discussed with President Biden, and what we expect next year and for what we are preparing. This is very important for all Ukrainians, and I am hopeful. And once again, thank you, Mr. President, for $45 billion, because this is a big assistance, and I hope that the Congress will approve this financial assistance for our country.

This is almost $45 billion. Thank you very much for the support. Every dollar of this investment for the United States is going to be strengthening of global security. I know that the American leadership will be strong and will play an important role in global scope. And the United States will help us to defend our values and independence. And regardless of changes in the Congress, I believe that there will be bipartisan and bicameral support.

And I know that everybody works for this. And of course, during all of my meetings today, we discussed issues of a standoff against the terror of Russia, the destruction of our energy infrastructure. We need to survive this winter. We need to protect our people, and we need to be very specific in this area. This is a key humanitarian issue for us right now. This is the survival issue. We are discussing sanctions and legal pressure on the terrorist country Russia. Russia needs to hold – to be held accountable for everything it does against us, against our people, against Europe and the whole free world.

And it is very important that we have the peace formula. And for that, we offer very specific steps what America can do to help us to implement them. We propose global formula for peace summit. I'm thankful for our American counterparts that they feel us and understand how important it is to continue and stay on course and work on integrity of the country and international rule of law. We will also need, as soon as our defense capabilities will be strengthened in the next few months, I don't want to discuss it in details right now. I believe you understand why, but I am very grateful to President Biden. Thank you for your attention to all of these issues. Glory to Ukraine.

Thank you very much, Mr. President. We're going to take questions from four different reporters, and I'm going to start with Alex of Yahoo News. Thank you, Mr. President. In 2022, you presided over a bipartisan international coalition to support Ukraine. How will you keep that coalition from fraying in 2023? And President Zelensky, welcome to Washington on this beautiful winter day. What is your message to the American people? Well, answering your question first, I'm not at all worried about holding the alliance.

I assume this is simultaneous. Я вважаю, що це одночасно. Добре. Добре. Я ніколи не бачив НАТО або Європейську Союзу більш зберігальнішимися про будь-яке. І я бачив жодного сигналу, що тут була б будь-яка зміна. Ми всі знаємо, що тут є на рахунку. Європейські партнери все більше. Вони повністю розуміють це. whether there being any change. We all know what's at stake here. Our European partners all the more so. They fully understand it.

This is about, we've never seen a major invasion of a European country since World War II. And they see no signs that Putin is going to do anything to change that unless we resist and we help the Ukrainians resist. We all know what's at stake, the very idea of sovereignty, the U.N. charter. Putin thought he would weaken NATO. Instead, he strengthened NATO.

I once said to him that we talk about the he wanted to see the, you know, Europe end up being divided. And instead, what did he do? He produced a more united Europe with Sweden and Finland joining. So I don't see any reason to believe there will be any lessening of support. And as we reach out to our NATO allies, our Secretary of Defense and the Secretary of State, we get continued support, not only there, but also from around the world, from Japan and many other countries as well. So I feel very good about the solidarity

of support for Ukraine. Thank you for your question. Thank you very much. You asked me what is the message to American people. I think I will tell you very simple things, which are very important for me. And I think so that we have the same values and the same understanding of the life, the sense of the life. My message, I wish you peace.

I think that is the main thing. And you understand it only when the war in your country, when somebody like these terrorists from Russia come to your houses. And I wish you to see your children alive and adult. And I wish you to see your children when they will go to universities and to see their children. I think that is the main thing what I can wish you and of course to be together with us generally because we really fight for our common victory against this tyranny. That is real life. And we will win.

And I really want win together. Thanks so much. Not want, sorry. I'm sure. You call on one of your people? Press person? Yeah. Please.

How inter? Yeah, thank you. Dmitry Anopchenko, Ukrainian television. President Zelensky, President Biden, I got a question to both of you, but firstly, as Ukrainian, and I mean it, I want to thank United States for supporting my country. And, you know, my family is in Ukraine, and I definitely understand they will not be alive today

if America will not support my country, both politically and militarily. So thank you for this. It's honest. And as of my question, we enter a new phase of this war, and you definitely discussed today which path to choose, how the war could come to an end, and what's next. Will it turn into a new counteroffensive or some kind of peace talks? So, Mr. Biden, Mr. Zelensky, could you share your vision? What's the fair way to end this war, and how do you understand this

word, fair peace? Thank you. My view? You're a guy. I think we have. I see. Although I like him very much already. . . . You have started this question. .

I'm sorry. Sometimes I switch on my native language. .. I'm sorry. Sometimes I switch on my native language. You have started by stating that your family is in Kiev and without the assistance of the United States. This is absolutely true. The U.S. leadership in this assistance is strong, and again, I would like to remind you that U.S. family will be in danger without the armed forces of Ukraine, which is very important. That concerns your questions per se. What would you like to hear? Just peace? I don't know. I don't know what just peace is. It's a very philosophical description. If there is a just war? I don't know.

You know, for all of us, peace, just peace is different. For me, as a president, just peace is no compromises as to the sovereignty, freedom, and territorial integrity of my country, the payback for all the damages inflicted by Russian aggression. I'm sorry I'm reminding, I'm talking about children a lot today, but as a father, I would like to emphasize, you know, how many parents lost their sons and daughters on the front lines. So what is just peace for them?

Money is nothing, and no compensations or reparations are of no consequence. They live by revenge. I think this is a tremendous tragedy. And the longer the war lasts, the longer this aggression lasts, there will be more parents who live for the sake of vengeance or revenge. And I know a lot of people like that. So there can't be any just peace in the war that was imposed on us by these, I don't

know how to describe that because we are in the White House and I can't find the proper language. So these inhumans, I would say. Let me respond. I think we share the exact same vision, and that a free, independent, prosperous, and secure Ukraine is the vision. We both want this war to end.

We both want it to end. And as I've said, it could end today if Putin had any dignity at all and did the right thing and just said, pull out. But that's not going to happen. Not going to happen. It's not going to happen now. So what comes next? We talked about today was we're going to continue to help Ukraine succeed on the battlefield. It can succeed in the battlefield with our help and the help of our European allies and others. So that if and when

President Zelensky is ready to talk with the Russians, he will be able to succeed as well, because he will have won on the battlefield. And, you know, I don't think we should underestimate the impact this war is having on Russia and the losses they're suffering. And you saw just I think it was two days ago, Putin saying that this is much tougher than he thought. He thought he could break NATO. He thought he could break the West. He thought he could break the alliance. He thought he could be welcomed by the Ukrainian people that were Russian speaking. He was wrong, wrong and wrong. He continues to be wrong. The sooner he makes it clear that he cannot possibly win this war, that's when the time we have to put this president in a position to be able to decide how he wants the war to end.

My turn, huh? Please, yeah. Phil Matterly, Matt Matterly of CNN. Thank you, Mr. President. Welcome, Mr. President. Mr. President, to start with you, your advisors often talk about how important, how critically important you view face-to-face interaction. I'm wondering, after spending two-plus hours face-to-face with President Zelensky,

what you learned or what you took from the meeting that perhaps you couldn't glean or learn in the phone calls or video conferences, and somewhat tied to that, was there any discussion related to the U.S. assessment that Russia would not take escalatory action now that patriots are being sent, a patriot battery will be delivered? Let me answer the first question, the first part of your question. You know I get kidded for saying that all politics is personal.

It's all about looking someone in the eye, and I mean it sincerely. I don't think there's any substitute for sitting down sitting down face to face with a friend or a foe and looking them in the eye. And that's exactly what's happening at this moment. We've done that more than once. We're going to continue to do it. And the winter is setting in and Putin is increasingly going after civilian targets and women and children, orphanages. This guy is, well, but he's going to fail.

And he's going to fail. He's already failed because he now knows that there's no way he's ever going to occupy all of Ukraine. There's no way in which he's going to be accepted by the Ukrainian people. And so he's failed in the past, and it was very important for him and everyone else to see that President Zelensky and I are united, two countries together, to make sure he cannot succeed. And I think I may be mistaken, but I know I judge every leader by the way they, what they say to me, their consistency. And look him in the eye.

This guy has in his, to his very soul, is who he says he is. It's clear who he is. He's willing to give his life for his country. And all the folks that came with him today. And so I think it's important for him to know we are going to do everything in our power, everything in our power to see that he succeeds. What was the second part of your question? I just asked if you had discussed how the U.S. calculated the escalatory effect of sending a Patriot missile battery to Ukraine. I did not discuss that at all with the president, but we do not.

It's a defensive system. It's a defensive weapon system. It's not escalatory, it's defensive. And it's that you wanted to make this trip for a while now. Why now? And also, can you tell me what you think the message you are sending to President Putin is, given the fact that 24 hours ago you were on the ground in the front lines with artillery echoing behind you, and now you find yourself in the White House standing next to the President. Thank you very much for your question. As to what is the message for Putin, I am standing here in the United States with President Biden on the same podium because I respect him as a person, as a president, as a human being for his position.

And for me, this is a historic moment. I can send messages to President Biden. For example, if it's not serious, you said, what's going to happen after patriots are installed? After that, we will send another signal to President Biden that we would like to get more patriots. President Biden, President Trump, President Trump, President Biden, President Trump, President Trump, President Trump, President Trump, President

Trump, President Trump, President Trump, President Trump, President Trump, President Trump, President Trump, President Trump, President Trump, President Trump, President Trump, President Trump, President Trump, President Trump, President Trump, President Trump, President Trump, President Trump, President That is our life. We are in war. I'm sorry. I'm really sorry. That is my appreciation. As to President Putin, in 2019, we had a Normandy meeting. In 2019, I became the president of Ukraine. And at that time, we were sending maximum messages to President Putin, telling him that there shouldn't be a

full-scale invasion to stop aggression, to renew our territorial integrity, to find diplomatic solution. God forbid we should not have a full-scale war. At that time he said it won't happen. He was lying. So what kind of message I can send him after he actually destroyed our life,

is destroying our life. He can even go further, somewhere where the Soviet Union stayed before this, so he might want to invade those territories too. I believe that there is something mortal about his inadequate approach to the world. Why we need to send him a message? He needs to be interested in getting attention from the world because he is not a subject of civilized people. He should be interested in trying to save something of his culture

and history of his country. So that's his problem now. This will be the last question. All you've been watching president biden ukrainian president vladimir zelensky hold a joint news conference welcome to fast money i'm frank holland in for melissa lee we're gonna get to our traders and the market rally in just a moment but first let's get to our white house correspondent kayla taushi kayla well frank in the east room of the white house as presidents biden and zelensky take one final question from a Ukrainian reporter. They're standing next to each other on a stage here in Washington to reestablish a united front between Ukraine and the West as the war in that country enters a new phase, becoming more bloody as the deaths rack up, more painful as Russia attacks civilian infrastructure and colder as Russia

uses weapon, uses energy as a weapon or in President Biden's words, weaponizing the winter. In the questions that we heard just a few moments ago, the presidents were asked how they would respond if Russia decides to retaliate against the announcement today that the U.S. would be sending Patriot missiles to Ukraine. In a moment of levity, President Zelensky said he would simply ask Mr. Biden for more Patriot missiles. But what was elusive, Frank, was any semblance that there will soon be an end to this war. Despite the fact that the two leaders discussed diplomacy and the possible

diplomatic paths, President Zelensky had very harsh words for Mr. Putin, as did President Biden, who he said remained unwilling to negotiate, unwilling to display any decency. So, Frank, the expectation is that this war will continue with $45 billion in new funding about to be greenlit by Congress. That is expected to go through September of 2023. President Zelensky will take his message directly to Congress and the American people this evening. Frank. All right. Thank you very much, Kayla. Our Kayla Tausche, live at the White House.