Closing Bell - Closing Bell Overtime: NYCB Fallout 3/6/24

Episode Date: March 6, 2024

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business. 

Welcome to Closing Bell. I'm Scott Wabner, live from Post 9 here at the New York Stock Exchange. This make-or-break hour begins with three big stories on our radar this hour. Turmoil at New York Community Bank. Shares plunging as it races to raise new capital, though shares halted multiple times today. That story continuing to develop. We've got the very latest coming up. Fed Chair Jerome Powell, meantime, on the Hill before the Financial Services Committee in the House, perhaps with a more dovish tone than some had expected. Stocks got a little bit of a lift off that.

The rally itself resuming but weakening as we head into this final stretch. And that's all following yesterday's steep sell-off, perhaps on continued hopes today and expectations of rate cuts sometime later this year. We're going to bring in our experts on all of that in just a moment. Let me show you the major averages. We have been green all day, but as I said, we are weakening as we enter the final stretch. We're still holding on, but the Dow is only good for about 15 points. NASDAQ's been the outperformer. Cut those gains in half, though. The mega cap stocks, many of them bouncing back, but they've since gone negative. NVIDIA is still positive, moving towards $900 a share. Meta is in the green as well.

Apple, Microsoft, Amazon, Alphabet, Tesla, they're all red now. How about CrowdStrike? Those shares are sharply higher after its own earnings report. A lot of concern coming in, maybe after Palo Alto, and that stock went down a lot, not so much for Crowd. Up a lot in today's session, near 11%.

All of it takes us to our talk of the tape, rally and risk, and how both are front and center today, given the day's many developments. Let's welcome in senior economics reporter Steve Leisman, senior banking reporter Leslie Picker, Josh Brown, the CEO of Ritholtz Wealth Management, and a CNBC contributor. He is here at Post 9.

Leslie, I want to begin with you. We've had a crowd over my shoulder for the better part of the last half hour as this stock opened. It was halted. It's done about a 65 or so percent round trip today. Take us through what the latest developments are. Yeah, the saga of the stock today is just a microcosm of what this bank has gone through over the past few weeks or so. But the announcement quite striking today, a whole shift in the management team, a refresh of the board, really an infusion of a billion dollars in capital. And you see shares currently somewhat stable compared to what they've been doing earlier today. So I can run you through the details here. Securities Strategic Capital, that's the firm managed by the former Treasury Secretary Steven Mnuchin, as well as Hudson Bay Capital, Reverence Capital Partners, and Citadel, the hedge fund,

not the securities firm, as well as some other institutional investors, are making a combined $1 billion investment in this company, subject to finalized regulatory approvals here. According to the terms of this agreement, NYCB will be issuing in aggregate common stock at a price of $2 per share. They're also giving investors 60% warrant coverage to purchase non-voting stock with an exercise price of $2.50 a share. So those are kind of the terms of the deal, again, subject to regulatory approval. And then there's a change in the C-suite. You have Joseph Otting, who was formerly with the OCC, former comptroller of the currency. Sorry about that. He is taking that C-suite role, becoming CEO. Sandro Dinello, who was just named CEO a week or so ago,

is going back to non-executive chairman, a role that he held just for a short while following that Moody's downgrade and before he became CEO last week. And they are adding four new directors to this board and shrinking the size of the board to being nine members. We saw one defection from the board once Daniella was named a CEO. So this is it's been a saga, to say the least. But of course, the announcement today at least clarifying what is happening with this capital raise. And as one analyst described it to me, comfort capital for investors who just want to know what is happening, what the status of this bank is. Yeah. You stay with me, Leslie. I mean, if for anybody who's been whether, I don't know, stuck somewhere, you didn't have access to any financial market information today. If you just

looked at the screen and today and you said, oh, well, New York Community Bank, there's news the stock is up three percent, misses the whole story because the low of the day was a dollar seventy. The high of the day, four dollars. So we're going to continue to watch that. I've got Josh Brown next to me. And, you know, I remembered half an hour ago that it was about a month ago where I think you you bought this stock. You owned it for a minute. Yeah. But nonetheless, you looked at something for a moment, said, hey, I'm going to take a shot. And then when you saw things look like they were going to get bad, you're like, I'm out. Yeah. I mean, this is playing with fire. And anyone that bought the stock at a dollar 70 was was probably gambling or they had inside information because the

fundamentals here are absent a deal. This thing was done. Once they get those downgrades, then you start talking about deposit flight. And you can't own the equity of a bank where there's a deposit flight underway. And for people that hadn't seen that happen in 08, 09, even into 2011, this was like a nice lesson for them. and for people who had seen that before understand that. So there were people that that I guess won today by buying, you know, a dollar seventy two dollars prior to the halt. But I think what's good about this is that this is almost Buffett esque. This is the former Treasury secretary of the United States now involved. And not only that, he took stock. In addition, the most powerful hedge fund manager in the world, he's taking stock. In addition, Otting, who's going to be

the new CEO, worked with Mnuchin at, I think, Bank West or One West. So there's a history here of these gentlemen working together at a commercial bank. This is not something where it's like just this, you know, let's throw a dart. So I think the equity is OK. The longer term ramifications of this, though, I think should not be be left out of the conversation, which is we're now going to take a second, third and fourth look at a lot of other regional banks and a lot of nontraditional lenders. And of course, there's an idiosyncratic issue here, which is the rent stabilized apartments that were so concentrated in New York Community Bank's books. Fine. There was also those idiosyncratic issues last spring with the venture capital concentration. But when you have so many banks that each have their own issue pile up, eventually it stops being a one

off situation and it starts to be something where we start using the term systemic more. So I don't think we've gotten to that point, but it just reintroduces that fear back into the conversation after a full year since the last go-round. Steve Leisman, on any other day, undoubtedly the Fed chair testifying on Capitol Hill and coming off more dovish than perhaps the markets had expected would be the obvious lead. But here we are talking about bank stability. And the irony is so was the Fed chair because he was asked about it, not NYCB specifically. But this was unfolding as he was in his seat in the House today. Yeah, and I think, as usual, Josh put his finger right on the issue, which is the extent to which this is systemic.

And I have this formula that I use, Scott, if you're interested, which is that the systemic risk nature is a multiple of the amount of money in question multiplied by the opacity of the problem. And the question here becomes, do we know where the losses are? Do we believe that the regulators understand where they are? And are they addressing those with the banks? Powell tried to convey the idea that he does answer both of those in the affirmative, that they're working with the banks. He said it's more small and medium. I don't know if this has the potential to gross up to being a systemic risk issue. It does not appear to be residing in the larger banks that are out there. And to the extent that they are, I do know that some of the banks have taken reserves against those potential losses.

So we have to watch it. And we have to also know, I think, Mnuchin, who we know to be a smart guy, what did he see in this bank that made it worth it for him to come in and take the equity? Was it a kind of benevolent bailout or was there a profit motive in there that he sees it? And that could help out, by the way, other small and medium banks in there. I will mention one other thing, Scott, which I think is really interesting. I don't know if Josh wants to comment on this. One thing I've been impressed with is the ability of the market to distinguish

between office commercial real estate problems and the other commercial real estate sectors that are out there, from the data centers to the shopping malls to the apartments. It does not appear as if all CRE is being treated by the market with the same kind of response, that they're saying, OK, this is an office problem, not a CRE wider problem. I think that's exactly right. And one of the in-jokes right now on Wall Street is every firm has a rescue fund. They're launching for CRE specifically like Goldman Sachs has like everyone. Everyone's already talking about the rescue before the crisis could even happen. So it feels like there's a lot of capital. It feels like there are a lot of players who are like begging for a blow up. There's a kid doing 600 million square feet of San Francisco office real estate, I believe, right now. They wrote him up in the journal.

There are a lot of like white knights. There aren't enough crises for all of these white knights to fund. So it's a little bit ironic and it doesn't mean things can't get worse. But right now, when everyone's already like launching the rescue fund, it's really hard to start panicking over the potential for systemic risk. But of course, we're all adults, so we keep it in the backs of our minds. Steve, I think Josh, you know, said it best when when he said that, you know, investors are going to be taking a second and third look at the regional banks now, even if you still believe this is idiosyncratic and it's not systemic, you're still going to be going over these with fine tooth combs before you're willing to put any money at risk. And I would gather that Fed officials now are going to be doing the exact

same thing, making sure they fully think they know where everything is, so to speak. Yeah, I would just point out, usually the thing that whacks you on the upside of your head or the backside of your head is the thing you didn't see coming. And it may be that there's been enough visibility of this problem. Again, it doesn't mean there won't be losses. And by the way, that some banks won't go down. The question is, how does the market treat it? Does it treat it such that you hear news of a bank failure and you sell the entire regional bank index? Or is it possible that the market starts to make a differentiation between these banks, Scott? So I think that's important here. Nobody said there won't be losses. There will be losses. There will even probably be some bank failures. But it's a

question of how contained it is and are the regulators, as they say they are, as on top of the issue. This also falls on the shoulders of banking reporters like our own Leslie Picker, right, Les? I mean, you've got SVB and now you have this. And, you know, I'm sure you're looking at all of these as well, trying to figure out exactly what all of the loan books look like, what the balance sheets look like and what could be out there that you'll be reporting on in the not too distant future. We hope is not the case, obviously. But, you know, you just don't know. Yeah. And I think it's got another idiosyncratic aspect to this bank in particular is New York Community Bank did two really sizable deals in the last year, year and three months or so, which put it above a hundred

billion dollar threshold. They bought Flagstar and then they bought a lot of the assets and liabilities from the signature failure. All of that together put them in this different bracket for regulation. So they were getting kind of this new scrutiny from the OCC. And part of that has kind of created this pressure on them to mark their loans sooner rather than later. So I think there was this idea maybe in the investor community that when they bought Signature, they'd get this blessing from the regulators to take some time, kind of work through, phase an approach to work through some of the criticized loans on their books. Instead, according to reports that are out there, they got this pressure to mark those pretty quickly. And that came as a surprise to the market. You saw that in their fourth quarter earnings at the end of January caused them to set aside a lot more reserves, caused them to slash the dividend. And that is what really

started this whole spiral for New York Community Bank in the first place. Credit quality, that's been a big concern that's out there. There's, you know, kind of it depends on the firm, the type of disclosure you'll get on that front, which makes it kind of hard for investors. But just interestingly, that this this regulatory bracket that they found themselves in has created, you know, an additional layer of difficulty as they work through those loans. One one aspect of the idiosyncrasy is the fact that this is predominantly New York state real estate loans. And we actually had a rule change where the rent-stabilized apartment business had been a great business for, I don't know, two centuries or a century or so.

Since 74. Yeah. So, but now you have this situation where the landlord cannot do building-wide improvements and push those through the price increases to the renters, which drastically changes the funding situation, the liquidity, the interest in these properties. And that's why the marks had to move when they had to move, because there was a fundamental change on the ground in this specific market. So I think a lot of people are going to look at this and say, oh, well, it's like New York City stuff. This doesn't apply to Austin, Texas. This doesn't apply to Nashville. And they would be right.

You know what, Steve? You know, the other issue I think worth addressing here is the idea, at least when it comes to financial institutions, it's why people like Mike Mayo suggest Goliath is winning, because you think it's an accident that J.P. Morgan is at a new high in the last several days or Bank of America is at a new high in the last several days. You know, J.P. Morgan did its own deal in the aftermath of SVB that was very beneficial to that firm. And you could certainly understand why you would continue to see capital flows from investors go towards the largest financial institutions, because at least you can put your head on the pillow, you think, and sleep well at night. I think that's right, Scott. I think that diversity in those banks and their banking,

their loan books, is something that investors can feel better about rather than this possibility that sort of what Josh and Lesley are talking about. There's some regional banks someplace that has an enormous amount of commercial or office real estate in a particular city that's not doing particularly well because of the aftermath of the pandemic. That would not happen in the in the big banks there. One other thing worth noting, though, Scott, part of that whole thing is this other story that was a big part, in fact, a bigger part than the monetary policy discussion, was the coming apart of the Basel III proposals. They are, it is a big loss, I want to say, for this administration. It's a big loss for Michael Barr at the Federal Reserve. They're getting their head handed to them on this one here.

I don't know the extent to which Powell embraced all of this, but he's certainly now one cool remove away from the proposal. And he's talking about the idea of, if I'm using the words correctly, broad-based changes or even re-proposing Basel III. And I would take a step back, Scott, having watched the banks in the, however many years it's been, almost 15, 16 years since the great financial crisis, where they have essentially been very much, I mean, not quite nationalized, but maybe you want to say, you know, wards of the state is the best way to put it.

And here they are fighting back against something from the government and appearing to win this. So there might be some character change here in the position of the banks relative to regulation and the regulators in their success in beating back Basel III. Well, no one happier, I'm sure, hearing the Fed chair today than Mr. Diamond, Solomon and some of the others who are running the largest banks in this country, because they've been in those very seats on the Hill within the last six months to a year, railing against those proposed regulations. So you can bet that's the case. Oh, Stephen, oh, by the way, the Fed chair actually talked about monetary policy today.

And maybe what he said was a stimulant in some respects for the stock market, because you said earlier that he came off more dovish than maybe people had thought he would. Yeah, and as a reporter, I'm duty bound to tell you that not everybody agrees with me. There are people out there who thought it was the same old. But I thought this idea of him saying a bit more evidence is not a lot of evidence. It's just a bit more evidence. And then I'm also saying we don't need better inflation numbers. We just need more of the same inflation numbers. That tells us, Scott, that more or less we're already there, even accounting for the January numbers, that we're kind of there. He thinks those numbers are going to improve because the old numbers are

going to bounce out through the base effects. So I think we're there. We just need to see, as Powell said now, these numbers repeat themselves, not necessarily improve to set the stage for the rate cuts. We're just going to keep hitting New York Community Bank stock because, again, low was 170. It's, you know, double that at this moment as we learn of this capital raise. I want to go back to Josh Brown is sitting next to me. What's your big takeaway from, you know, yesterday's market sell off was rather dramatic. And you had the Fed chair today.

Not really. He didn't tell us anything we didn't know know I think you could say we still expect rate cuts to come later this year almost said as much where are we in this market here with the rotation that's been pretty substantial mega cap stocks I said remain a little unsettled what's your view yeah I think one by one we're losing the Magnificent seven I mentioned on halftime yesterday I'm now seeing research notes referring to them openly as the Sensational 6. I don't know if we become the Fab 5 next. Meta seems to be hanging in there the best other than NVIDIA. We've lost Apple. It's lower highs. We've lost

Alphabet. That's now below its long-term trend line. Not looking great. Amazon's just okay. That's now below its long term trend line. Not looking great. Amazon's just OK. So like that theme feels really tired and it should. These stocks have done a lot of the work. So from my perspective, it's not do I no longer want to own tech? It's like, where am I looking for my next opportunities? I just don't think it's a 500 billion dollar tech stock. So and there are others out there. There are some big tech names that I think are well-positioned, but we've done this AI theme to death at this point. And I just feel as though you're seeing this shift below the surface. You're seeing a lot more names in the S&P 500 at 52-week highs that have literally nothing to do with tech.

And I love it. I really like that i was gonna say i was gonna say something that alluded to exactly that that there were maybe other you know market periods within this rally over the last couple of years that you would say well if we lose the mega caps we're in big trouble so i never that's not my that's not my shtick i never believed that but it's different well maybe it was the case back then it's not the case now for the very reasons you said. There's enough stuff under the surface of mega cap tech that's actually been picking up the slack quite nicely. And there are a lot of people who think that's going to continue. And that's why this rally has legs, they say.

Look, there are two things going on simultaneously. And they sort of dovetail and almost feed off of each other, which is kind of cool. The first is we are literally re-industrializing the economy. And we used to giggle at Jimmy Labenthal two years ago when the Infrastructure Act and the Inflation Reduction Act and then eventually the CHIPS Act. But you're starting to see that in the actual earnings for industrial companies. And that's why the XLI, it looks like it's an AI in tech.

Those stocks look unbelievable. And all of them are going up with very few exceptions. If you're a mid cap or a large cap or a giant industrial stock, you are probably above your 200 day moving average right now. And you've probably made a 52 week or all time high in the last six weeks. That's not happening by accident. That's not serendipity. There's a genuine driver there. The other driver is that wages are now outpacing the growth of inflation. This is so, so important. That's two legs to the stool. There's a third leg that the strategists are talking about. And if you get it by the second half of this year,

and AI will play a role in this, it's super meaningful, that is productivity. So if we can get productivity, we can get this continued spend, domestic spend or reshoring, whatever you want to call it, and the consumer wage and labor picture stays healthy, no one's going to be asking for rate cuts because they become not the thing that matters. And so that's the reason to be bullish from my point. I don't care if Powell does his first 25 bips in May or June or September. I just don't think that's terribly important right now.

If I were Barry Sternlicht and I was running Starwood, I might think differently. But I'm not. I'm a stock guy, not a real estate guy. And I don't think that the rate cuts are like this essential ingredient that we're all waiting for. We're at all time highs. We're all time highs. Home prices are bouncing back. What do you what do you need the rate cut for right this second? I don't see the need. And you know what, Steve Leisman, I'll give you the last word because I don't see and I don't think and I think the Fed chair has made it pretty clear himself, as have other Fed speakers. They don't see the need either't think and I think the Fed chair has made it pretty clear himself, as have other Fed speakers, they don't see the need either.

And they're in no rush for some of the very reasons that Josh said. I hope they're not watching Bitcoin because then there's no rate cuts coming ever. No, no rush. But he did say we do need to cut. He did talk about the idea of this restraint. I was actually concerned, Scott, today ahead of the speech that he would embrace more of that. We don't really have much to do here and it doesn't feel like we really need to cut rates. He did not embrace that today, Scott. So I'll push back just a little bit on that take. This is a Fed chair that does believe rates need to come down and

should come down. Great. But Josh is right. He doesn't feel the urgency about it. Yeah. Yeah, that's great. No, you're right. And, I mean, look, I think he made his point today. They're close. They're close.

He almost is comfortable enough to do it, just wants to see a little more piece of information to, you know, let him put his head on the pillow after they do it. Guys, thank you so much. I would say, Scott, I would just say I'd say two more months to prove that January was an anomaly. I think that's the key right there. OK, I hear you, Steve. Thanks so much. Leslie Picker, our thanks to you as well for hustling for us on this story on New York Community Bank. Josh is coming back in the zone because we have some CrowdStrike to talk about. I can't wait to do that. In the meantime,

I'm going to send it to Christina Partsenevelos now for a look at the stock she's watching into the close. Christina. Well, I'm watching Pal send it to Christina Partsenevalos now for a look at the stock she's watching into the close. Christina. Well, I'm watching Palantir because their shares are up almost 10 percent today after climbing, what, 52 percent this year alone. The software platform Builder announcing a new $178 million contract from the U.S. Army to develop 10 AI-powered ground stations as part of a project called Titan. Palantir has a long history of providing AI solutions to the U.S. government and its allies, so investors are betting these initial 10 systems could mean more future contracts.

But we'll have more on this new deal on Closing Bell Overtime today with an interview with Palantir's chief technology officer. Brown Foreman moving in the opposite direction. The maker of Jack Daniels and other spirits lowered its full-year sales guidance and cut, or guidance, I should say, and cut its annual organic sales forecast, a sign that higher prices might be weighing on consumer demand for whiskey and other spirits. Shares down over 8 percent, Scott.

Christina, thanks so much. We're just getting started here. Up next, Momentum Mania, one of this year's top strategies, trying for its longest weekly winning streak in nearly four years. And Wells Fargo Securities, Chris Harvey says that trend will remain your friend. We're live from the New York Stock Exchange. You're watching Closing Bell on CNBC. We'll be right back. Rebound in stocks losing some steam here as we head towards the close. You can clearly see that.

We are barely hanging on to positive territory, at least for the Dow. Tech and high momentum names are still outperforming, even after recent weakness. Joining me now, Post 9, to break down what's next, Wells Fargo's Chris Harvey. Welcome back. Thank you. Head of equity strategy, of course. What do we make of what's happened in mega cap lately and what's happened elsewhere lately? Well, if you have momentum, it's great. If you don't have momentum, not so good. So everyone talks about the mega caps and all you have to do is buy into the mega caps. But if you look at the mega caps that are in the Momentum ETF and the ones that aren't, significant difference in year-to-date performance. Apple, Tesla not in there, Berkshire, and the rest, and they're having negative returns this year.

And the rest are up about 25, anywhere between 25 and 29% on average. Big difference. So it's not just a large cap issue. It's a momentum issue, and it's right across the board. It also goes down to small cap. If you look at the return to the Russell 2000, Russell 2000 growth, S&P 400 growth, the big driver, Supermicro. Supermicro accounts for almost 100% of the year date return. And stock only moves 50% every day, one way or the other.

That's it. That's it. That's not bad. Are you positive on the market? One thing that's interesting to me, and it hasn't happened to everybody, but this market has turned bears into bulls, yourself included. Right. And are you feeling now, even though we've come a long way since the October, November beginning low, that we still have a lot of room to go because of the Fed ultimately cutting rates?

What would you say? So the answer is I don't know. The answer is what you want to do is you want to be able to participate. You want your portfolio to be able to participate, but you want something in there, a hedge. Because you can make a case that this market will blow up, right? You can also make- You can? Can you make a credible case that it will?

And if so, what's that built on? When I say blow up, it means both ways, right? You can make a case that the Fed's going to start cutting rates, M&A is going to take another step higher, that the macro is good enough, and that this is a momentum market. And in a momentum market, I haven't seen this kind of market since the late 90s. And you do not apply. We don't talk about the market so much. We talk about positioning, sectors, and stocks, because that's what happens. The disparity between the winners and the losers is phenomenal, right? And so you could have a situation where the winners just keep running,

similar to the late 90s. But what's the difference between the late 90s and today? The fundamentals and the valuation are so much better than they were back then. And now what do you have is if the Fed starts cutting rates, if the GOP takes over the Senate, which means that regulation will change, you're going to have a really big boom in M&A activity, which means you're possibly going to have more speculation. On the reverse side, if I'm looking at the Fed, I'm saying to myself, Fed expectations are probably, or Fed's guidance and some of the Fed numbers are too conservative, right? They're saying that S&P, not S&P, excuse me, they're saying that GDP is going to be 1.5%.

I highly doubt that we're going to have a 1.5% GDP environment. I think it's somewhere between 2% and 2.5%. If that's true, three cuts, highly unlikely, and maybe no cuts this year. And that's a very different environment. I'd say it's a bit of a stretch to think that we're not going to get any cuts this year. I mean, the chair himself would probably think that's an outlier view because they know they need to cut. And, you know, Steve Leisman very well articulated all of the reasons why. But it's within the realm of possibilities, right?

We think there's a possibility in the realm of possibility that we get it by bus when we walk out of here. But is that a high probability? We're going to look both ways before we cross the street. I hope not. No, but if you look at what's on the ground, right, this is not the kind of environment that you typically cut rates in, right? S&P is in a bull market. Credit spreads less than 100 basis points. Economy better than expected. Unemployment less than 4%. You don't cut in that kind of environment. Well, you do if you raised by 500 basis points in the span of 16 months.

Yeah, but what's breaking at this point in time? You want to wait until there's a credit issue and then they're reactive? Well, that should be showing up in credit spreads, but it's not, right? Yes. Of course it's not now. So we can wait a little bit, but you asked me, can we go up? Can we go down? I can make a plausible case. You can go both ways, right? It's more likely the upside, there's more pressure to the upside, but there's going to be risk at some point in this market. And that risk will probably relate it to Fed and Fed expectations. Well, I mean, there's, you know, of course there's risk every day. There's one risk over both of our shoulders. You know, it's trading right behind us, New York Community Bank. Yeah. Right. So you see how these issues come front and center. The belief though, do you think this is idiosyncratic?

You feel like there's anything worth keeping your eye on, much to do about nothing big? What has cut our eye, a couple of things. Rates over the last two weeks have come down on a 10-year about 20 basis points. More of a risk-on situation with bonds. Is that related to New York Community Bank? Maybe. What also concerns us is, hey, we go back to some of the biggest momentum markets in 98, 99 into long-term capital, which was an idiosyncratic issue.

You had the S&P down 10%. You had small caps down 20%. So in a momentum market, you can get some pretty big moves, right? And they can be related to idiosyncratic issues or exogenous events. Now, people would look at the market and say, you know, it's actually a good thing that momentum is going to take a break because if I look at, I don't know, materials or financials or industrials or these more cyclical areas of the market, if they weren't reacting well, I'd say, well, Houston, we got a problem. But now it's actually a good sign, isn't it? It's a positive sign, but the average stock's

still not doing that well, right? What I think in momentum is still- When you say average stock, what are you talking about? Are you talking about like from the Russell? What's the average stock? From the Russell 3000. If you take the Russell 3000, the average stock, right? If you look at the average stock in the S&P, they're not doing that well. Everything, if you look at every single indice, it's all top heavy, right? If you took out the returns of Super and Micro, if you took out the returns of NVIDIA and a couple others, the returns to the market look a lot different. If we have a portfolio that I run, I oversee, it's our model portfolio. We have 10% in cash, and that thing's outperformed by more than 2%. Reason being is we have some of the right stocks that are working

and working in a big way. That shouldn't happen in a normal type market. That tells you a lot about breadth. That tells you about the average stock. Great conversation. I loved it. Thanks for being here. Thank you. That's Chris Harvey, Wells Fargo, head of equity strategy. Coming up more on this volatile day for New York Community B Corp. Gilman Hills, Jenny Harrington. Well, you know, by now she owns the stock. She was with us today on the halftime report and she was feeling pretty lousy. She might still be feeling lousy, but she's going to tell us exactly what's going on with that trade next. Given what this stock is doing now, a far cry from what it was doing then. Welcome back. Let's get back to New York Community Bank announcing a $1 billion capital raise, a leadership shakeup as well. You take a

look at shares, which were as low as $1.70 today, and they're well higher than that on this news. Gilman Hills, Jenny Harrington, she owns that stock. She joins me now on the phone. We're watching, Jenny, this stock trade north of $3 now on this news. I said, and I honestly am not making light of anything. I know how lousy you felt when we spoke earlier today. Now that you've had a chance to digest some of this news, can you tell us what you're thinking about this stock? Sure. So what I'm thinking is that over the past month, the excessively stupid missteps that we've seen them make, today it's the opposite, like just within the context of today.

What they've done just now is as extremely smart course correction as the missteps have been stupid. So when we look at who's coming in, I think actually the new board of directors is the most important to me. So we see Milton Berlinski, who ran the Goldman Sachs Financial Institutions Group, actually created it. Steve Mnuchin, who is also a Goldman partner and then Secretary of the Treasury. And the two other new board members are both from One West. One will be the new CEO. So when I was complaining before that a year ago when they bought those signature assets, they should have brought, you know, people with really big bank, $100 billion plus banking experience in,

they have done that, and they've done it in a major way. So what I need to do now is, you know, I always say the starting point is today. And so where do you go from here? And so my job now is to do the following. One, I need to continue to sell out of the stock. It's violated all of my investment theses, but I need to do that as smartly as possible. It doesn't mean I just blow it out. There's just too much ambiguity. I don't know how to assess the tangible book value right now. I need to figure out what they're doing with the dividend. And then for taxable accounts, there's like that big tax loss that's valuable. Then I'm going to let the dust settle, figure out what tangible book value is, see what this new management is actually doing. And then after that, I would honestly consider buying it

back because this is such a great new management team and such an important addition to the board. So it is dicey, but it's interesting. And earlier when I said to you, well, what's upsetting me the most is that there's these really, really great assets they have, and vultures are coming in and picking them off. Well, as a shareholder, you get to keep owning those assets, and they are valuable. And this is a statement to that. So you use the words course correction, and I know you're specifically

talking about the company and you laid out all the steps. But, you know, you know how this is, you know, once a narrative develops around a particular stock, you can scream, this is better. The fundamentals are great. You know, until you're blue in the face. Is it a course correction necessarily for the stock over a long enough period of time that would make you excited to stay in it and even the chance that you would buy more? Because again, I look at a move like this and I'm saying, well, Jenny told me that she's been selling some here and there, that this is the moment that she's going to get out. No, I'm going to finish selling it. I need to finish selling it.

I'm mostly out of it. I need to get out of it. There's too much ambiguity for here and now today for me. You know, my job is to give my clients a very steady income stream from dividends that they can depend on. That's a race. I don't know how steady and secure that is right now. But I'll sell it now. I'll do it smartly.

Clearly down at $1.86 this morning it was oversold. I still think it's worth probably at least north of $4, hopefully more than that. So I'll just keep getting out of it smartly. But that's where I'll let the dust settle. And I really would consider going back in. I am extremely enthusiastic about the development of like who's investing. I mean, it's Steve Mnuchin, it's Hudson Bay, it's Reverence Capital, which is Milton Berlinski, it's Citadel. Like those are real heavy hitters

who can actually really like affect change at a company. And I think those guys can change the narrative. And the board is impressive. The new CEO is impressive. I like that they're keeping Sandro Dinello along because they know that he's the smart one in the thing and knows everything inside that company at this point. So I think they're on the mend. By what magnitude that means, I don't know. All right. We'll leave it there. I appreciate your time, Jenny, so very much. We'll see you soon. Jenny Harrington, Gilman Hill, joining us up next. We're tracking the biggest movers into very much. We'll see you soon. Jenny Harrington, Gilman Hill, joining us up next. We're tracking the biggest movers into the close.

We're back with Christina Partsenevelos for that. Christina. Well, we have lower prices helping one e-commerce platform, and RV dealers are feeling the pinch from higher interest rates. Those stock movers are next. We're about 13 minutes from the closing bell. Let's get back now to Christina Partsenevelos for the stock she's watching. Christina.

Well, we have a new $3 billion share repurchase program and an earnings report that beat analysts' expectations. Both are major drivers for JD.com. That's why the stock is up 17% today. The Chinese e-commerce platform has been lowering prices amid rising competition and did see a bump in new users from lower tier markets. On the downside, though, Thor Industries is slumping today after posting disappointing quarterly revenue. The RV manufacturer also cut its sales and earnings guidance just before its peak retail selling season,

you know, heading into the summer. The Airstream parent company is down double digits and is dragging down competitors Winnebago Industries and Camping World with it. Thor down 15.5%. All right, appreciate you. Christina Partsinevelos, thank you. Still ahead. Time to catch it. Thor down 15.5 percent. All right. Appreciate you, Christina Partinevelos. Thank you. Still ahead. Time to catch it on CrowdStrike. Shares surging to an all time high today. Josh Brown's been a longtime believer in that name. We're going to find out if he's

sticking with it next. We're taking some profits. We're back on the bell right after this. We're down to closing bell market zone. CBC senior markets commentator Mike Santoli here to break down the crucial moments of this trading day. Plus, Josh Brown of Ritholtz is back with us. We'll get his reaction to the rallies in CrowdStrike and Pfizer. And Courtney Reagan on the stocks taking down the retail space today. Mike Santoli, we had a lot to get through today, and we're going to do it. And it looks like we're going to finish green across the board, and I'll put the Russell in that mix, too. It is green. So we're picking up about half of what was lost yesterday in the S&P. So it certainly shows you that there hasn't

been some kind of a selling spiral unleashed by a down 1% day. And I'm a little bit, I think it's a nuanced setup right now, which is it's a bull market. The market's done absolutely nothing to make you doubt the overall trend. It didn't even pull back to its 20-day average. It's 400 stocks making new 52-week highs today on the New York and the NASDAQ. It's all to the good. I just still do think, though, that it has made sense that we flatten out here. And yesterday's low was basically where we reached first on, you know, let's say the 12th or 13th of February. So it goes back three weeks. And that's the kind of thing I think is probably better, letting the market cool off and go from boil to simmer,

because otherwise it feels as if it could get a little bit too jumpy. You know, again, I might be too cautious there because, you know, with all the benign macro and yields coming down and the Fed going to likely cut within a few months, it's hard to find the thing that's going to be the trigger. But for now, I still do think that you'd love to see sentiment cool off and maybe get more of a gut check. And even when we were spending much of our time, Mike, saying, well, the Fed's not going to cut when we initially wanted,

and they're not going to cut how much we initially wanted. Powell gave you the chair, of course, gave you a reminder today. He reminded the bulls, but we're still going to cut. Well, but that's right, because the broad framework hasn't changed, right? And this is a committee, and the committee is on the record with a consensus outlook, even if it's not developed in that way, which says five and three eighths on the Fed funds rate is extraordinarily high relative to the rate of inflation. And our models say that's restrictive. Now, we could say the economy is not acting like it's being restrained very much.

That's pretty much true. But the job market has softened. It's less tight than it was. Housing has taken its lumps. And, you know, you still do see these things like non-mortgage debt rising to record levels. And, you know, in other words, there are reasons for them to be on alert for not being too late. And he said the risks are balanced and we can deal with that. And I agree with Josh, though, about we're not so finely tuned to when it happens or how many cuts we get.

Oh, not anymore. It's just about having the potential for easing in reserve. CrowdStrike doesn't care. It's up 10 percent today on the back of those earnings, reserve. CrowdStrike doesn't care. It's up 10% today on the back of those earnings, Mr. CrowdStrike investor. Yeah. I was going to say, actually, the first rate cut is actually a better thing to have to look forward to than to actually get. I joke, it's the carrot you hang out in front of the donkey to keep it moving. Yeah. It's like that distance between two things where you never actually reach because you keep getting cut in half, cut in half. Asymptote.

It's asymptotic if and when we get that first rate cut. Let's push it into 25. Crowd strike is a banger. I don't know. What else? What is left to say? People say, oh, it's 80 times earnings. Yeah.

Earnings growth is 87%. What should it be? What should it be? So this is the gift that keeps on giving. Just when you think the momentum simply has to slow, not only does the cybersecurity pie keep growing, but CrowdStrike finds a way to take share from other players. Because not every cybersecurity company that reported this quarter had a nice reaction. CrowdStrike's reaction stands out.

It's not up as much right now as it was last night after the close. No big deal. The stock looks fantastic. It is the second largest market cap in the Russell 1000. That's not currently an S&P 500 component. I think they need one more quarter of something to qualify or to get in. I think that's a fait accompli. It's something that I would look for to happen over the course of the summer. You want to talk about Pfizer, too, which you said was one of the best stocks to buy in this market. You said that just the other day on the Halftime Report, and it's up a lot today, I think. Let's take a look at Pfizer as you talk about it.

I got lucky. I think it was added to the Schwab dividend ETF, which is a monstrously large ETF. It's in a lot of Schwab model portfolios for wealth management, for retail, et cetera. So I think the addition to that is the reason behind today's big jump. I certainly wasn't counting on it or expecting it, but of course, I'll take it. I'm not giving it back. You got to be lucky to be good, right? Sometimes they work. But the fact remains, this company did a huge acquisition. The fruits of that acquisition will not be coming in calendar 2024. You have to have the vision to understand this is not the first near-death experience that Pfizer has faced from a drug expiration standpoint.

And it won't be the last. But they are set up to revamp the portfolio, get away from the COVID stuff and move more toward oncology, which is a growth market and some other areas. It's an investment that people attributing Morgan Stanley being down almost four percent today because it did not get into that ETF. You and I read the same tweet. Is it true? I'm running with it. You have different standards than I have. No, I mean, I'm asking the question here.

Did Morgan Stanley not make the or get bounced out of the ETF? There was anticipation that it might go in or something. Let's not get into it. But it is interesting that Morgan Stanley is down 3.5%, 4%. Nothing else in the group is off. I can't find another reason. Right, right. All right, we'll go with that. Courtney Reagan is watching retail today and some of these stocks that are not having a great day, Courtney.

Yeah, Scott, you know, there's a number of retail stocks tumbling. But like usual, there's a lot of nuance as to why. So Foot Locker shares are down a staggering 32-some percent. The athletic retailer's results actually better better expectations, but it says it now expects a two-year delay in achieving its previous earnings and margin potential that it laid out in its March 2023 investor day. Abercrombie again put up a strong quarter above expectations among, if not the strongest results for retailers, several quarters in a row. But shares have run pretty far up as a result. So today's down a little

likely some profit taking and Nordstrom to be consensus for earnings and revenue. But it's outlook disappointed. Shares down something like 16 percent. It's rack business turning in much stronger sales than its full line department store business. So that also tells you that consumers are really focused on looking for those value conscious kind of items. Scott, back over to you. All right, Court. Appreciate that very much. Courtney Reagan, Josh Brown. We have about 90 seconds to go.

Give me something on Uber, which I've been watching the last couple of days. Hasn't looked all that great. Down 3% or so for the week thus far. Just one of those stocks that was up an awful lot. And there's a little bit being trimmed off of it. Yeah, I mean, this is a stock that's... Your biggest holding. I bring it up for that.

It's my biggest holding. It's a stock that's had a huge being trimmed off of it. Yeah, I mean, this is a stock that's... Your biggest holding, I bring it up for that. It's my biggest holding. It's a stock that's had a huge run going into the earnings. The earnings confirmed that it deserved that run. But like all other tech growth stocks, even though it's an industrial, the question is, well, what have you done for me lately or what's next? And we'll see.

But I'm not going anywhere. I'm sticking with Uber. I think it's a $100 stock. It's just a matter of time. But I do think they have one of the best CEOs in all of tech right now. This is a guy that literally took a carcass of a failed startup

that had limped past the finish line of going public. They had nothing going for them. And this guy figured out all of the moving pieces, what to get rid of, what to keep, what to double down on, survived the pandemic, survived the post-pandemic. And so I want to bet on him in the future. Mike, Tesla's down another 13% on the week.

And time momentum stops, continue to suffer. Although Apple, being very oversold, is trying to find its footing here. Yeah, we'll see if they can get a bounce. Guys, thanks so much. Appreciate having you. Disgusting markets today. It's been an interesting one between NYCB, Powell on the Hill.

He's going to do that again tomorrow. We're out.