Closing Bell - Closing Bell Overtime: Scott Minerd’s Market Strategy 06/28/22

Episode Date: June 28, 2022

Stocks sinking to end the day, with the Nasdaq falling nearly 3%. Scott Minerd of Guggenhiem Partners gives his market take – and some insight on the SPAC space. Plus, Calixto’s Eduardo Costa weighs in on the big slide in tech today. And, market expert Mike Santoli’s “Last Word” on Minerd’s stance on the Fed.

John, thanks. Welcome to Overtime. I'm Carl Quintanilla for Scott Wapner. You just heard the bells, but we are just getting started. In a few moments, you'll hear exclusively from Guggenheim's Scott Minard. We'll get his take on the recent volatility and the one thing he is watching to declare an all-clear for the market. But let's begin with our talk of the tape today. That bear bounce breakdown, stocks did tumble across the board. About a 900-point swing to the downside on the

Dow, the Nasdaq dropping 3%, worst day since June 16. Take a look at the carnage on some of the big tech names, AMD, Nvidia, Salesforce, Amazon, all dropping between 5% and 6%. Let's break down today's sell-off with our panel. Joining us today, Joe Terranova, Virtus Investment Partners Senior Managing Director and CNBC contributor. Joe. What did happen to this morning's rally? Hey, Carl. Great to see you. Well, I think it really is about commodities and a lot of the disinflationary conditions that were emanating from a sell-off in multiple commodities, specifically natural gas and crude oil. We saw that reversal this morning, a lot of that on the reopening, the soft reopening for China. And the minute that we saw that move higher in energy, that's when the

market kind of began to fall through and go back to what it's done the last several weeks, which was any bounce was met with aggressive selling pressure. So despite all the chatter going into the week that we were in a calendar period where rebalancing was going to help good seasonality, you're still favoring health care and to a lesser extent, energy. Yeah, I think, look, you have to be diversified in this market. You can't have any form of concentration. And the reasoning is clear. The cost of capital in 2021 was free. The cost of capital in 2022 is a moving target. What is belief that well maybe the Federal Reserve will reach a moment here at 2022 where they'll begin to end the process of raising rates you take that off the table today if we're going to continue to see energy prices move high inflationary pressures emanate through the economy it's a moving Target and if it's going to be ultimately a moving target, then that means that the valuation recession that we're in right now is going to specifically

target long duration assets. That's where the challenge is ultimately going to be. It was reflected in the tape today. And your defense mechanism against that, because you're going to have persistent and elevated volatility, is to ensure that you're diversified, look towards sectors like health care that offer the proper blend between offense, defense, growth and value. And that's going to be the way that you're going to be able to kind of mark through this process of time in a way that's more defensive in its nature. Joe, let's bring in our CNBC contributor on the news line, Bryn Talkington of Requisite Capital. Bryn, to Joe's point, your larger idea regarding the markets has been the market can't take its eye off the ball and the ball is, in fact, the Fed.

Yeah, I mean, absolutely. It's like you have to get back to the old tried and true adage, don't fight the Fed. I think that investors need to understand that we're seeming to have a longer term macro regime change. And so if you think back the last 10 years, you had global central banks increasing their balance sheets and keeping rates at zero. Now we have global central banks reducing their balance sheets while increasing rates. And so I think that if you also look at the last 10 years, 40% of the return from the S&P came from actually multiple expansions, and only 15% came from dividends. Historically, that's almost the reverse, where about 50% came from dividends. And so I think investors need to do two things.

You know, lower their expectation for returns going forward and think through that we are having this regime change. And I agree with Joe about health care, looking for dividends, because I do think that longer-duration assets are going to just be at risk from how much the market wants to pay for them while we are going through this, you know, really repricing of assets, because ultimately it doesn't matter what earnings a company has. It matters what multiple the market wants to pay for those earnings. So from a sector standpoint, Bryn, where does that lead you?

Were you impressed at all by the div hikes out of the banks yesterday? And where does earnings season and earnings guidance lead us when we start getting these prints? Is there any value to any CEO to overpromise, given the likelihood that the tape is probably not going to reward them? Right. Well, I think Lenar, you know, Lenar the home builder last week, I think their CEO said it spot on. They had wonderful earnings across the board. But then at the end of the call, he said us giving guidance would be more akin to guessing. And so we're not going to do that. And so I think you're going to continue to see CEOs giving less guidance because they do think that this is a moving target with the consumer.

This is a moving target with rates. And so I think, you know, Nike, you know, we saw Nike's down like, what, 7 or 8 percent because they had good numbers overall. But once again, their guidance was weak at all. So I think investors are going to remain in this purgatory, this investment purgatory over earnings season. And you probably trade lower because of that because people are going to just, once again, throw in somewhat the proverbial kitchen sink from a lack of guidance. And the market can't value that right now. Yeah. You know, Nike Joe is a great example. It went green earlier this morning, closed down seven, inventories up 23. Sort of the exact thing that Cathie Wood was talking about on Squawk Box this morning. Bloated inventories, rollover in

metals, rollover in ag, rollover in shipping rates, the idea that we're already in recession. How does the Fed think about that? Think about hiking into that kind of cycle. I think what the Federal Reserve has to see is inflation come down. And ultimately, Carl, that only comes through the process of time. I think people are incorrectly trying to identify some form of solution in price, trying to look at valuation. As I said before, we're in a valuation recession. When you're in a valuation recession, you are going to reset valuations much lower than what the historical average might suggest for a bottoming process.

So the Federal Reserve is looking towards all of this. And the only answer comes in the form of the course of time. And over the course of time, when does inflation come down to a level where the Federal Reserve feels comfortable that they've now reached the terminal rate in raising rates? They're not going to pull back on reducing the size of their balance sheet. But it's not until we have that clarity from the Federal Reserve to when they're no longer going to continue to raise rates. That's when you're ultimately going to find the comfort of where the markets are going to begin to stabilize. Finally, Bryn, on energy, you know, we got this trip of the president going to Saudi in a couple of weeks. This hot mic moment from Macron at G7

saying that maybe the Saudis don't have the capacity to boost production. Do we believe the White House would be making this trip if there weren't hard deliverables in the way of capacity or production? I mean, I think it would be so foolish for President Biden after he's, you know, disparaged, you know, MBS throughout, you know, the past couple of years to go hat in hand all the way to Saudi asking to increase production. Once again, they could just ask the American producers to increase production, but go all hat in hand and then come back empty handed, especially during midterms. I think it would be political suicide.

So, I mean, I'm guessing they are going to come back, and maybe it's just rhetoric, but he is not going to come back empty-handed. And so, for me, you know, we're in the energy space. You know, with the names we still have, we have sold calls against them because I do think the volatility going around this meeting is going to put, is going to be higher within the energy names. We're in Talkington. Joe Terranova, guys. Appreciate that on quite a market day. We'll talk to you soon. Let's get a bit more on today's sell-off. Joining us exclusively, as we said,

Scott Miner, the Global Chief Investment Officer of Guggenheim Partners, joins us here at Post9. What a treat for us, Scott. Thanks for coming in. Oh, Carl. Good to see you. Great to be here. Thanks for having me. You've been pretty vocal on Twitter, at least last couple of weeks. Your general worldview is that it's awfully hard to call an end to the bear market, at least in equities, right? I think so. I mean, look, Joe, I thought Bryn's comment was really insightful, which is, you know, don't fight the Fed. You know, I've had the opportunity to

meet with a number of the presidents and governors. And the theme is always the same, which is we're going to continue to raise rates until we get inflation under control. And as long as the sell-off is orderly, they're not concerned with the level of stock prices. So the bottom line is until we see some amount of panic here or something that gets the central bankers concerned, they are just, excuse the expression, hell-bent to get inflation under control. So they're applauding days like today, in a sense. They are, I think. So they would say, well, you know, financial conditions need to tighten to some degree. And look, it's a sell-off, but we're not making a new low.

And, you know, if we make new lows in an orderly way, then that's good. How do you think about an out-of-the-money Fed put if one exists right now? Well, it's funny. I went to the central bank conference at Stanford a couple of months ago, and I went in there with that idea in my head. I walked out with, there is no price play here. They're concerned about financial stability, which is, you know, sort of, you know, it's kind of like you'll know instability when you see it, like pornography. Or jazz.

Yeah. So, you know, we'll make it up as we go. And so I was really surprised that they were not more willing to engage in a conversation about that there needs to be some sort of financial stability. Because, look, in the pandemic, we did something that we never did. Right. We bought corporate credit. Right. I mean, we raised in the bar and I thought, man, or lowered the bar. And I thought, man, they're going to be sensitive to it. And they don't show any signs at all. So do you, at this point, are you worried about systemic risks or instability? Or is this all sort of going the way it's supposed to go? Is QT sort of like watching paint dry so far?

Well, it will be until it's not. And the way the expression I tell people is that the Fed and the central banks are going to press on this until they break something. And if you remember back in 1997, when we had the Asian crisis, out of the blue in 98, we got long-term capital and all of a sudden they had to reverse course. There's been a number of incidents like that in the past. We had the pivot back in 2018. And so there's a tendency in times like this when the Fed is so focused on inflation that there's something that is coming up out of what they would call the shadow banking system, like a hedge fund collapse or something. And, you know, that's where I think, you know, I mean, it's hard to predict that kind of thing, but that's the

thing I think we have to be prepared for. Well, coming out of the 75 basis points, some were thinking back to the last one and Orange County, which a lot of traders are probably a little too young to remember. Well, I was the first guy to pull the plug on Orange County, so I'm well acquainted with them. And, you know, Orange County had a big derivatives position that was not disclosed anywhere. And as they raised rates, they came under a lot of pressure. And here you had a double A municipality all of a sudden having to declare a bankruptcy because, you know, they got in trouble. Now, you have said you think that Bitcoin is a bit of a tell that until we get a low in crypto, maybe more generally, it's hard to say we're going to get a low in anything else.

Look, I love what somebody said recently, which is prices go to infinity when money costs nothing, right? Or dreams go to infinity when interest rates are zero. So all the crypto stuff, there are 19,000 coins. I mean, most of it's just junk. You know, you look at something like Ethereum, you look at Bitcoin. I personally think they survive. I believe in the crypto concept.

But nobody's cracked the code yet. Meaning, you know, the definition of money is that it has to be a means of exchange, a store of value, and a unit of account. No one has been able to tick any one of those boxes off yet. But the future of crypto is really built on that paradigm. And until somebody does this, and I think there'll be new crypto products to come out, but this reminds me a lot of the internet bubble, where things know, things just went to ridiculous levels, ultimately crashed. And then we came back to an incredible prosperous age using the internet. Right. The underlying technology. Exactly. But are you in the, not to use another name, but the gun lack

school where 12,000 on Bitcoin wouldn't surprise you? Oh yeah, that wouldn't surprise me. I mean, I'm on record saying 8,000. So not to try to one-up Jeff. But, you know, I think that's where you see, I mean, the technicals in crypto have been very good in terms of predicting. 8,000 is a level where you get firm support. And, you know, that's probably a place where you start thinking about it. Right. Now, fixed income might be a slightly different view for you at this point. Right. Yeah. Explain it. Well, you know, it's interesting because we're starting to see the signs that the market

is discounted all the Fed tightening. We got the 30-year at one point down below the 10-year. The yield curve typically inverts from the back end and works its way up. So at this stage of the game, you know, I think the 10-year note is fairly priced. When you look at credit, corporate credit has only been cheaper than this relative to treasuries less than 25% of the time. So, you know, I like to remind people, you know, I used to be a trader, but now I'm an investor. And so if you're not worried about what the price will be tomorrow, but you're worried about what the price will be in six months to a year, fixed income makes a whole lot more sense now than stocks. At the short end or the long end?

I think you want as much duration as you can tolerate. So we've been extending duration in our accounts and we've been adding to credit risk. And, you know, I think that history shows us that the long-duration assets rally first, and then the curve will steepen eventually once the Fed reverses course. Right. You think 10-year revisits 3-4 gets past it? I think 3-4, somewhere around there, will be the high. We might go back, but I wouldn't put off putting money to work now just because we're not there today.

How about geopolitics? How do you think the war, NATO, G7, OPEC later in the week, how much is that steering where we're going right now? Look, geopolitics has had a huge impact here. I mean, the price of oil, you know, all the issues in Europe. Certainly, Europe is probably already in a recession. You know, it's flowing into the United States. The uncertainty around, you know, the future in terms of agriculture prices, all kinds of stuff. So geopolitics is playing a bigger role.

The problem here is it's very difficult to predict, right? I mean, will China move on Taiwan? I would tell you probably not. But at the same time, you know, most people didn't really expect that Russia would move into the Ukraine. And, you know, will Russia use a tactical nuclear weapon? I can't rule that out. But these are the kind of landmines that are out there, and it's not to be taken lightly. It's one of the things that's bedeviling the market at large is that every forecast is sort of suspect, given the incredibly broad range of outcomes in China or in Europe. You know, it's interesting. I don't think there's been a time in my career where more people have told me they've gotten it completely wrong.

And, you know, I've got my share of mud. So, you know, it's a really difficult period. One last thing, tangentially, the hearings today on the Hill, January 6th. Market did lose some steam as we were getting some of this testimony. I wonder how you think that's, is it a factor? I think so. I mean, you go back to Watergate. Watergate weighed on the markets. And, you know, what we're hearing in these hearings is disturbing. Now, one thing I like to remind people is this isn't a court of law, right? So some people say, well, we haven't

heard anything in defense of the administration. And, you know, you won't until the judicial justice department makes a decision. But when you start to hear this kind of talk of events, you know, I remind people democracy is a fragile thing. And, you know, this is very disturbing that a great nation like ours would have to deal with something like this. And something that the markets will have to absorb one way or another. Scott, we hope you'll sit tight and stick with us. We do have more to talk about, specifically some of the reasons that brought you down today. First, though, we'll get some breaking news, I think, on Pinterest.

Contessa Brewer's got some details. Hey, Contessa. Yeah. Hi there, Carl. We've just learned from Pinterest that Chief Executive Officer Ben Silberman is going to transition away from that role and into the newly created role of Executive Chairman. And in his place will come somebody from Google Commerce. Bill Reddy is going to take over that CEO role. Of course, Pinterest, one of those strong stay-at-home stocks that saw a lot of strength during the pandemic.

But boy, has it been beaten up over the last year, down 75 percent. As you can see now on this news, up almost 8 percent on the news that Bill Reddy, who worked in commerce for Google, will take over the chief executive role at Pinterest. Carl. All right, Contessa, thanks very much. Still to come this afternoon, Minard on SPACs and some single stocks as well. Overtime is back in a couple. We are back in overtime with our exclusive with Guggenheim's Scott Minard, who came in to talk some Polestar as well and the Gore's Guggenheim SPAC. Right. What should we know?

Well, Carl, I think there was a great lesson here, and that is that everybody's talked about how SPACs are dead, right? And, you know, certainly SPACs got caught up in a euphoria where Wall Street did its usual thing, which take a good idea and take it to the extreme. But when you look at, you know, the companies like what we did today with Polestar, which is owned by Volvo, a subsidiary, and you get a team like Guggenheim and Gores together who have experience in the financial markets, who Alec Gores is a great turnaround guy, operator, it brings a certain level of credibility. And I will tell you that even though I couldn't talk about the company for the last two weeks or so, you know, the work that went on with the company telling the story and the credibility of it all. And I'll tell you the proof in the pudding in my mind is we set the valuation for Polestar last fall and didn't change it.

While every EV company is down 30 to 70%. And Volvo was great, they wanted a successful deal, they weren't trying to push the envelope on the price. And so I think for people who wouldn't have access to private equity, wouldn't be able to directly invest with KKR or TPG, but they'd like to be involved in that kind of thing, that the big sponsors who have experience in this area can actually bring credible deals, and it can give an opportunity for the average person who may not be an accredited investor

to go out and invest with people that they historically could never have been involved with. So you think the instrument has validity from here on out? Exactly. For people who feel locked out of the IPO markets, for example. But can it do that without relying on far-out projections that seem irrelevant to a lot of people? Well, it's interesting because when we did Polestar, we realized that because of the supply chain that the projections we had come out with were not going to be met. And, you know, Volvo, Alec Gores, me, we all insisted we have to go out and revise

the outlook. So even though we revised the projections lower, it had credibility. And I think you don't have to have crazy projections you know when you know that's the way you're going to sell it and you're a sports figure or you're a television star and you've got no business to acclimate but I think one thing that we learned in this experience when Volvo was talking with people that that people found that the the Gore's involvement the Guggenheim involvement brought a stamp of credibility. And, you know, we're looking at, we're hoping to do another one with Alec. And we're going to use the same criteria because my view was if this SPAC failed, it would be a blotch on Guggenheim's reputation.

And all we have is our reputation. And so it was important it worked were you determined to do something in autos or no not per se we looked at all kinds of stuff i won't name the companies we passed on please do really more interesting um but um you know we looked at people in the fitness industry we i mean we were pretty far afield looking at things and um you know i think that uh uh obviously with Volvo involved, this brought a lot of credibility to the deal. And, you know, I think the other thing was, another thing that was interesting is a lot of other SPAC providers had given Volvo a higher price indication than we did. And we were actually the lowest.

And they did it with us because they wanted to make sure they had a deal that succeeded and in a market like this to bring an 850 million dollar IPO I mean you know it's a it's a real testimony to the people involved but to the fact that the SPAC can be a viable concept and we need to treat it with the professionalism and respect that it deserves. Yeah, no, people are definitely not looking askance at what you got done today in this particular environment. A few other individual names that you've found interesting lately, one of them is going to

report this week, and that's Micron. Right. You said it could potentially benefit from more onshoring. Right. Talk about why. Well, you know, I think that, look, anybody who's, first off, micron's cheap, right? And I hate to say this, but I'm a value guy at the end of the day. So, you know, I think that there's just, the tide has turned with off-shoring. More production in every category and chips is going to increase here i've been

looking at some other names i don't want to say because i'm afraid i'll be accused of front running or something or piping a stock but um you know i think uh that's an industry that's interesting i know that i've also talked about paypal before um and um uh block i have to keep thinking it's not square anymore i I make that mistake all the time. Yeah. But, you know, these are concepts that are really valid. The stocks have been beaten to the ground. And you look at these companies and they've got positive cash flow. They're not, you know, they're not in danger of failing unless the concept fails. And so, I mean, it is an interesting time to look at value.

And if you're a long-term investor, I think you can go out there and cherry pick and find some interesting stuff. Do you take that to home builders as well? Because that's a call that graces a lot of eyebrows, at least right now. Yeah, well, I do. Because the home builders, I mean, the multiples are, they've gotten crushed on the multiples. And it's interesting because you look at the latest data on home sales. I mean, they went up. So, you know, the reality is there is a portion of the market

that's not interest rate sensitive, that the high end, the people like Toll Brothers, that they're doing that. And there's a shortage of housing. And again, this isn't something, you know, I hated it when I was in Wall Street. I hated managing money. If you're into instant gratification, I'm the wrong guy to talk to. You know, you buy things that make sense. You you going to pick the bottom perfectly? Never. Very seldom, anyway.

But is this something that in a year or two we're going to look at and say, especially with my view on rates, this is going to be a real winner? Right. Is that something you have to walk clients through, this idea that you may buy something and it may not feel great for a while because the stocks are going to bottom even as the economy continues to deteriorate. Yeah, you do. I mean, you have to, one of the biggest things that I spend my time doing is educating investors. And, you know, I'm an accolade of Danny Kahneman and the behavioral nature of investing. You know, I can remember, you know, being involved in certain assets.

And when the price is going up, we never invested enough. And when the price is going down, why didn't we get out and the whole bit. And so, you know, trying to get people to understand that, first off, doing a lot of tactical trading has been demonstrated to cause underperformance. Right. has been demonstrated to cause underperformance, right? So if you stick to the discipline, which we try to all the time, and you say, like I did today, that credit is only about 20% of the time it's been cheaper, this is the time to start buying corporate credit, right? I mean, it's cheap. It's not overvalued. The problem, will it get cheaper? Maybe.

I'm not going to ever say, especially if stocks keep going down. But it's a discipline that I think we're only 70% of our max limit on credit right now. So we still have room to take advantage of it, but we're going to keep adding. And then eventually this will work, I'm sure. Do you feel, last question, more confident in corporate balance sheets or household balance sheets going into the back half? That's an interesting question. Households are in good shape, generally. Corporate balance sheets are generally good. The place that I am concerned about is private equity sponsored companies. If you look at the leverage ratio on those companies versus the public companies, even in credits like single B bonds, the leverage ratio

is much higher. And so, and, you know, there's a little bit more opacity there because they're not listed. So, you know, I am, you know, suspicious about that. You know, but one thing I will mention about the household sector, and that is that, you know, 50% of all Americans or more have less than $500 in the bank, and they're living hand to mouth. They've seen gasoline go up. They've seen food go up. They've seen rent go up. Well, that's going to tell you discretionary purchases are out the window. Apparel is out the window, right? You're gonna you're gonna wait to buy a new shirt, you're gonna wait to buy a new car, and so that portion, the vast majority of Americans are in deep trouble, and so I

am concerned about household balance sheets, but I'm not concerned about them like I would have been in 2007 when a lot of them were over levered and shouldn't have been buying houses. We all remember. Scott, we could go all hour, but we got a lot of we chopped a lot of wood here. Appreciate it very much. Carl, it's a great pleasure. Thanks. I appreciate it.

Good to see you. Scott Minard. Let's get to our Twitter question of the day today. We want to know what you are watching to signal a market bottom, crypto, commodities, tech, or something else. Head to CNBC Overtime on Twitter, vote, and we'll get you the results at the end of the show. Got some breaking news here on Disney. Let's get to Julia Boorstin. Julia. Carl, Disney announcing that its board has voted unanimously to extend CEO Bob Chapek's contract as CEO for another three years. The chair of Disney's board, Susan Arnold, issuing a statement saying Disney was dealt a tough hand by the pandemic.

Yet with Bob at the helm, our businesses from parks to streaming not only weathered the storm but emerged in a position of strength. This comes after a lot of criticism of Chapek of how he and the management of the company responded to Florida's so-called don't say gay bill. But it also comes following a statement by the board in support of Chapek after Chapek fired Peter Rice, who was a very senior executive at the company. So there was a little bit of an indication from the board that they were going to extend his contract. His contract was up at the end, coming up in February. So this comes after a board meeting, which started yesterday. So this was clearly the result of a vote held at the board meeting.

And it comes ahead of his contract expiring in February. So certainly, Carl, a lot of challenges for Disney at this time when it comes to growing the streaming business and navigating some of these issues, such as that don't say gay bill in Florida. But this vote of confidence for CEO Bob Chapek after his tenure running the company through the pandemic, we see, you know, Disney shares have been down over the past year, but certainly some strength around things such as the parks. Back over to you. Pretty fascinating here, Julia, because his tenure had been talked about so much and considered rocky by some.

I do wonder, with this now new visibility on his tenure, to what degree he feels free to make some pivots. We had a long discussion with Kramer today about how he thinks parks need to be more of a focus for the street after years of Disney Plus and direct-to-consumer and streaming being part of the discussion. Yeah, look, Wall Street has certainly judged Disney largely on the success of Disney Plus and the growth of its streaming business. You know, those streaming subscribers were something that really influenced the way the stock moved around earnings every quarter. But the parks have been an area of strength coming out of the pandemic. The company just announced today that it's going to be reopening Shanghai Disney starting on Thursday. And this comes after that park was shut down for three months because of the closures in that city there. So, Carl, I think it's interesting

because parks are obviously where Bob Chapek came from, an area of strength for him. And he has been making a lot of moves in the streaming space. You know, they're working to launch an ad supported version of Disney Plus later this year. And they've been experimenting with different approaches to distribution of content on Disney Plus, as well as in theater. So for instance, there was a lot of concern. I heard from sources that there was a lot of concern about the fact that Lightyear, the Buzz Lightyear movie from Pixar did not perform well its opening weekend. It was number 18 in terms of opening weekends for all Pixar movies. And there was some question

about maybe that was because the last two Pixar movies were distributed directly to Disney Plus. So certainly some questions about how Disney Plus' growth is going to do. You know, this is a company that has maintained its targets for those streaming subscriber numbers, but there is a lot of attention on the numbers they're going to report in August. But this vote of confidence from the board indicates that things certainly seem to be moving the right direction there. Big news, Julia. Thanks, Julia Boorstin on Disney. It is time for a CNBC News update with Shepard Smith. Hey, Shep. Hi, Carl. Thanks. Dramatic testimony on Capitol Hill today. Cassidy Hutchinson, former aide to the White House chief of staff Mark Meadows and an insider with broad access

in the Trump West Wing, was the lone witness in today's January 6th committee hearing. She testified President Trump knew that the mob was armed on insurrection day and asked that the magnetometers at the Ellipse be removed so that they could get in. She testified President Trump's aides did not want him to lead the mob to the Capitol that day and that when he learned after his speech that the limo was not taking him there, this happened. The president said something to the effect of, I'm the effing president. Take me up to the Capitol now.

To which Bobby responded, sir, we have to go back to the West Wing. The president reached up towards the front of the vehicle to grab at the steering wheel. Mr. Engel grabbed his arm, said, sir, you need to take your hand off the steering wheel. We're going back to the West Wing. We're not going to the Capitol. Mr. Trump then used his free hand to lunge towards Bobby Engel. And when Mr. Renato had recounted this story to me, he had motioned towards his clavicles. During her testimony, President Trump

was responding in real time on social media, disparaging the witness, saying she was bad news, as he put it, and that her story was not true. Tonight, a complete recap of the long list of new information at today's hearing, including the word from one committee member that there's evidence of witness tampering, plus convicted sex trafficker Ghislaine Maxwell learns her prison sentence, and NATO's big announcement on Finland and Sweden. A jam-packed hour on the news, right after Jim Cramer, 7 Eastern, CNBC. Carl, back to you. Shep, what a news day today. We'll see you tonight. Upcoming up next, tech the big loser today. The Nasdaq down nearly 3%. Calixto's Eduardo Costa finding some opportunity in the pullback. He'll join us next when Overtime returns. Nasdaq got slammed today. And while some growth names have been hit in this rising rate environment,

our next guest is still finding some pockets of opportunity in the space. Joining us now, Eduardo Costa, Calixto Global Investors founder and portfolio manager. Eddie, it's great to have you back. Before we get to some individual names, I wondered, today's action, disappointing or just indicative of the environment we're in right now? Great to be on, Carl. Good to see you even on basically every show on the network at this point. In answer to your question, you know, the reality is that if you look over the course of the last week, week and a half, the Nasdaq and the markets more generally have had a pretty stark rebound as a function of rates rolling over periodically and folks starting to think that maybe inflation is peaking. As you know, we're not macro economists. At the end of

the day, we're bottoms up stock pickers in the tech and consumer sectors. And, you know, while there are certainly opportunities that we're finding on the long side, I think we've been able to preserve capital this year as a function of really spending an inordinate amount of time finding short opportunities. So to be honest with you, the price action that we saw today was sort of to be expected, given the rally that we've had and a lot of the negative fundamentals that we're seeing out there. Yeah, that makes sense. On the long side, a couple of names you point out. One is Avis on a travel leisure rebound specifically. And 5.9, you're talking about tech that's been down a lot. In fact, you say some of the things you're concentrating on that are trying to pick a bottom in stocks and they point to how far down stocks are from the peak. If you look at the software sector, just as an example, you look at the multiples, the peak multiple for the fastest growing software stocks was in the 30 to 40 times revenue range, which, you know, 30 to 40 times revenue. I mean, it's reminiscent of the dot-com era. And as we stand here today, those same group of companies are trading at 10

times revenue. Now you would say, Hey, maybe that's an interesting opportunity. But if you go back to 2017, you know, that same group of companies was trading at seven times revenue. And so, you know, multiples itself, isn't where we're going to find the bottoms here, because what we're seeing in a lot of companies is that the next leg on the year and really since its peak last summer when it was about to be taken out by Zoom. Looking at a company that's a leader in the cloud-based call center software space, this is, just to contextualize, there's 20 million call center employees globally across the industry. Less than 20% of those are on the cloud. Five9 is one of the key leaders in that space. And this is a company that's gone from 20 times revenue to six times revenue. It's growing 30% consistently, and they're beating top line numbers by 10 to 15%.

And we're looking out and saying, hey, we can buy this company now at 20 times EBITDA. So, you know, that's the type of risk-reward scenarios that we're gravitating towards. Finally, Eddie, I don't have a lot of time, but on the short themes, online retail, e-commerce, I noticed today the ETF, the online retail ETF down, worst quarter on record. You're talking Carvanhas, Pelotons, Lyfts. You don't have a lot of faith in those themes. Look, I think one of the challenges that you see out there is if you look in the home furnishing space or you look in the sporting goods space or any number of these sectors and you look at the 2019 government data and what was the revenue run rate for those sectors

and you look at where we're run rating today, we're somewhere like 40 percent above the 2019 levels. So you sit here and you ask yourself, you've had this massive pull forward of buying. At the same time, it would appear that most of the experts feel like we're going into a recession where the consumer, particularly at the low end, is weakened because of what's going on in the economy, because of the layoffs that you keep announcing every day from a different company. And so, you know, these companies have invested massively in increasing their cost structure and they built a business that was outfitted for pandemic level volumes. And the real question

here on a lot of those sectors is, you know, what happens to the profitability of those businesses when revenues start to decline precipitously. Eduardo Costa, our thanks as always. Talk soon. Appreciate it. Thanks, Carl. Great to be here. Talk again soon. Coming up next, we're going to track some of the biggest movers in overtime. Christina Parts-Nevelos all over that action today. Christina? Oh, we've got shares of one aircraft manufacturer that are plunging in the OT, and the FTC is suing Walmart for allegedly turning a blind eye to scammers.

I'll have those details right after this short break. Tracking some of the biggest movers in overtime, Christina Partsenevelos is here with that. Hey, Christina. Hi, Carl. So the FTC just announced it is suing Walmart for allowing scam artists to use its money transfer services. In the lawsuit, the FTC alleges that for years, Walmart turned a blind eye to scammers who would cash out at Walmart stores because staff was not

properly trained and customers were never warned. Shares of aircraft manufacturer Aerovironment are plunging in the OT right now, down over 8% on Q4 revenue and earnings that fell short of estimates. Management also warning they still face, quote, continuing macroeconomic challenges in operating the business, but there are opportunities in unmanned robotic solutions. And lastly, Amazon is limiting the number of emergency contraceptive pills consumers can buy as demand spikes following last week's U.S. Supreme Court ruling. Shoppers will only be able to buy up to three units per week of Plan B, or known as the morning-after pill. Amazon is the latest retailer to cap purchases. However, CVS is

reversing course after temporarily capping purchases of Plan B yesterday. They say demand has returned to normal levels. You can see Amazon trending a little bit lower in the OT, and then CVS up very slightly. Back over to you, Carl. All right, Christina, thanks so much. Coming up next, we'll get Santoli's last word and some breaking news from the FDA. Overtime, we'll be right back. Got some breaking news out of the FDA on COVID vaccines. Let's get to Meg Terrell with the details. Hey, Meg. Hey, Carl. Well, a panel of outside advisors to the FDA just voted 19 to 2 in favor of updating the COVID boosters potentially for this fall to include protection against the Omicron variant. Of course, that's important because it's completely taken over here in the United States.

And we're now not just on the first version of Omicron, but on the third or fourth version of this sub variant that's taking over here. So this would be the first update to these vaccines that we've seen since they've been available in two years. We will see what the FDA ends up doing, but quite a strong vote in favor of it. Carl, back to you. All right, Megan, appreciate that. We'll talk more about it in the morning, I'm sure. Still ahead, Santoli's last word, his take on our exclusive sit-down with Scott Minard in a moment. Let's get the results of our Twitter question. We asked you, what are you watching to signal a market bottom? 12% said crypto, 24% said commodities, 45%, the winner, said tech, and 20% said other. When we come back, Santoli's last word.

Let's get to Mike Santoli for his last word today. You know, Scott Miner talking about this general sense out there that the Fed is going to go until there's definitive evidence that inflation is ebbing or that something breaks. And I think it's worth asking what it actually would mean for something to break in addition to what we've already seen. Financial conditions have tightened faster this cycle than ever before. Now, from loose levels. And what about crypto? Has it already broken? If that's something that we're looking for to bottom, I also think it's interesting that crypto has shown signs of diverging to a degree in terms of the magnitude of its weakness relative to, let's say, the NASDAQ 100 and the ARK Invest fund, you see this is a quarter to date. Over the last couple of months, it's really deepened its losses.

So it's not clear to me whether that means that there's that much more to go or that dollar for dollar or percent per percent, crypto goes down and somehow equities go along with it. Also, I mean, is breaking, does it happen at once? Or can it happen over the course of a year? Consumer confidence or some of these regional Fed surveys? Exactly. No, the sentiment side of things, it's almost like we're done there. Mission accomplished, at least to a large degree.

You know, maybe on the corporate side, you need some more retrenchment. And just in general, I think they still think that there's a chance they get lucky with inflation rolling over a little bit as they try to get rates to where they think is a more sensible spot. PCE deflator is going to be one more piece of that puzzle. We'll get that Thursday, along with micron earnings as we work our way through relatively. We're going to hear from. Yeah, yeah, I think that's right. As we put more of these pieces together, Mike, we'll see you later on. That does it for overtime. Fast money begins right now.