Closing Bell - Closing Bell Overtime: Stocks Gain Despite Oil’s Rise; Finding Tech Opportunities Outside of U.S. 3/17/26

Episode Date: March 17, 2026

Paul Hickey of Bespoke joins on set to assess market momentum and where investors should be positioned. Lululemon headlines earnings with immediate reaction from Janine Stichter of BTIG. Beeneet Kothari of Tekne Capital argues that the next generation of tech winners may emerge outside the U.S. and explains where he is finding opportunity globally. Tim Hayes of Ned Davis Research makes the case for dialing back equity exposure and increasing allocations to bonds and cash as risks build. Finally Phil LeBeau reports on renewed optimism in the airline sector and what it signals about travel demand. The episode closes with a look ahead at the next catalysts investors are watching. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The bell is bringing in to the trading day at the NYC Diageo, ringing the bell and at the NASAC, AVA Technologies, doing the honors. Welcome to closing bell over time. We're live from Studio B at the NASAC market site. I'm Melissa Lee along with Mike Santoli. Stocks higher across the board, tech leading for the second straight day. The NASAC up about half a percent, more in the market straight ahead. On our radar at the close, we are awaiting results from Lulu Lemon and DocuSign. Also, where the next big thing in tech could come from.

And two Titans in media, one stepping away, the other two. cashing in. And Melissa, kind of a benign kind of slow drip upside move today. I mean, you say benign. I was thinking, meh. Well, it's pretty much a synonym, I would argue. I guess the most optimistic take is if oil can go up two or three bucks and the broad equity indexes can sort of shrug and make moderate progress as they did today, that's maybe, you know, represents a little bit of a resilience in the tape. I don't think it's quite getting to that point. It's very indecisic. We couldn't hold above in the S&P levels what we reached Friday morning.

It's funny, a few weeks ago when the market started to pull back, I and others were saying, you never want to break that December low in the S&P 500. We literally are there right now. We went below it, and it's kind of nothing much going on.

So I guess you could say sometimes memory stocks can get a balance and Amazon does a little bit. Banks didn't go down today. Private capital stocks were up, but it seems very much wait and see and we're not going to make any sudden moves. And there's different.

differentiation within the AI trade, and we were talking about how Jensen Huang wasn't able to rally in video stock at all. But under the surface, the things that he talked about is benefiting from his company's growth in AI. They actually benefit Amphanol, for instance, when he talked about the need for copper connectivity and on top of optical, Uber and Lyft. So it's interesting to see how at the index level, not too much overall since the conflict began, but underneath the surface, there is a lot of action. Without a doubt, the market is trying to separate those winners from losers. Let's get more on today's market action as NVIDIA.

Want to get a big driver. Sima Modi is taking a look at all the ripple effects. Hey, Sima. Yeah, we're actually going to look through all the winners and losers, Melissa, that one trillion dollar backlog. Not enough to boost shares of Nvidia, which ended the day down just about three quarters of 1%. But where we did see sizable gains, memory stocks as investors count down to micron's report tomorrow.

We did see Seagate, Western Digital, up about 5 to 9% on the day. But let's focus on micron shares. Trading at all-time highs, now up 60% year-to-date. Pretty impressive when you can. compared to the S&P, which is down about 1.9% so far this year. The stocks seeing price target hikes from Cowan, RBC Capital, and Baird. Micron said its high bandwidth memory offering is in production for NVIDIA. And then the right-hailing stocks also on the move after announcing different partnerships with NVIDIA,

Uber on Robo-Taxies. It said it's rolling out autonomous services in up to 28 cities worldwide by 2028. And Lyft on AI tools to enhance precision across its app. shares ending higher by about about 4%. The airlines getting some attention today after issuing a strong outlook downplaying the negative impact of higher oil prices. In fact, Delta's CEO Ed Bastion

telling CNBC that strong demand has led to higher revenue growth than expected despite inflated jet fuel prices since the war in Iran. Started, we saw Delta up about 6.5%, Mike. Seaman, thank you. Well, stocks rising today despite a gain in the price of oil. As you mentioned, Pippa Stevens has the numbers for us. Pippa. Mug, Brent, holding at 103 with WTI at 96, amid reluctance from other nations to escort

tankers through the Strait of Hormuz with Iran, also targeting UAE energy infrastructure. J.P. Morgan noting that WTI and Brent prices have remained relatively contained because both are Atlantic Basin benchmarks, while the physical disruptions are concentrated in the Middle East. Both Dubai and Oman cash prices are now trading around $1505 per barrel, which the firm said highlights the severity of the shortage in barrels originating from the Gulf. And as spot barrels become very expensive in Asia, there are early signs of demand destruction kicking in. Here in the U.S., diesel prices topping $5 per barrel per gallon,

I should say, for the first time since 2022, as product markets get squeezed with heating oil futures, a proxy for diesel, up another 4% today. Jet fuel is seeing the largest increase since the start of the war, with those prices doubling crude's rise. Guys? Pip, some ships are able to, some tankers are able to transit through the Strait of Hormuz along the coastline of Iran. Is that in any way impacting the price that we're seeing?

So I think there's some relief that there's a perception some ships are getting through. But of course, it's very specific ships. And if you actually look at the route that these vessels are taking, they're going kind of north between Gosham and Lerick Island. So they're passing, that's not the usual route. So they're clearly passing through Iranian waters with some reports that that might be to verify the cargoes, verify the ownership and where they're headed. So it's certainly something, but it's definitely nowhere near the traffic we saw prior to the closure. And clearly it's very targeted cargoes getting through. So the market very much still on edge here.

Yeah. And I guess the forward prices, too, moving up in lockstep, really, with WTI spot around 80 bucks come October of this year. Pippa, thank you. Our next guest says oil is the deciding. factor that will determine which of two diverging forces will win in this market, which right now, according on the S&P, showing a rare oversold condition. So either prices will fall further to justify this technical damage or those oversawed conditions will be resolved. Joining us now as Bespoke Investment Group co-founder Paul Hickey. So Paul, first talk about how even though the S&P 500 is not

that far from its highs, it's registering a little bit of an extreme in terms of downside relative to its trend? Not a little bit of extreme. It's one of the, we closed last week three standard deviations below the 50-day moving average. That's in the 99th percentile of daily readings in the S&P's history. So you tend to see that during major geopolitical political events, shocks and such. We were less than 5 percent from a 52-e high on the S&P 500 Thursday. There's only been two other days throughout the last hundred years where we've seen a similar situation. One was in 2015, and one was in the early 1960s. So this doesn't happen very often.

And what you were saying, Melissa, before, there's a lot going on underneath the surface, but it's like as calm as can be right at the surface. But that's the reason, though, that you can register that extreme with a small percentage move because the standard deviations are tight. The range has compressed, but it's just so rare to see these kind of swings.

And we can swing from overbought to oversold, and it takes less than 2% to do that. So it's a major shift, But it comes down to, for that big run off the April lows, we wanted to see the rally was so strong. People said we need to, you know, rest, consolidate. Well, we got it. We've been trading sideways. We got it in spades.

It's the most calm market we've seen in the last, you know, this last since October. Yeah. So, you know, we got it now. Now people are worried. But we're at this level where people are concerned because the market's not doing anything. And now oil spikes. And that's, it's like the COVID case counts back in. March 2020.

What happened in those two other instances in which this occurred? That's a great question. But in one period, we were up, one period where it went down. So it's a small sample size, and it's not even decisive either way. This just tells you how rare this happens. It's very rare, but what people do tend to think is that, okay, we've seen this tight range, we're going to go bananas in one way or the other. The reality is, you tend to just see a pickup in volatility over time, and it's not this,

you know, major, you know, breakout event that you tend to see or break down event. So the notion that we're sort of going to be spring-loaded if there's any sort of a victory declared, you think that's not the case according to what we've seen in history? No, but I think it'll be a big sigh of relief. You know, I think if we see oil prices decline, I think that'll be let the market and us focus on other things like the economy, which is doing pretty well. You know, all the concerns about the consumer, you had the airlines come out today, Delta, with the positive. You may say that's front-loading before they raise fares, but it's very

strong demand. We've been seeing strong demand. Consumer perceptions, our monthly Consumer Pulse survey has shown that consumers are most optimistic about their personal finances than they've been since early 2022. So it's, you know, we cratered down and now we've been coming up. So it's a very, it's not as bad for the consumer as some of the headlines would suggest. At these times, when you see this kind of sort of slow grudging decline. We keep talking about this. Everyone sort of says, okay, well, now we need something a little bit more dramatic on the downside just to kind of flush things out. You don't always, I guess. We didn't get it in a 5% pullback in November. But how would you be, you know, kind of trying to read whether the market

is showing its hand in that way yet? You know, I think what we're watching is we've, you know, broken the 50-day moving averages. We're starting to approach the 200-day moving averages. If we got to of the 200-day moving average, that could be a fake-out. You know, you had to say, okay, there's the breakdown, and it caused a little bit of short-term selling pressure, and I think then maybe you could see the market start to rally. But, again, it's going to depend on oil prices. We've seen oil prices go up an average of $2 a day since the war broke out.

If you just extrapolated that trend going forward, you're at $150 by April. It was interesting when you were on the halftime report earlier today, Mike. You guys are talking about the notion of capitulation, which is what you were mentioning, and Josh Brown said something like, you know, we remember that because we're all old and we remember, you know, those are the markets we know, but things are different now. Maybe you don't need that sort of capitulatory sell-off. I don't know. What are your thoughts on that? I thought that was an interesting notion. Maybe the markets are sort of- Well, you've seen plenty. I mean, April you saw a big capitulatory sell-off, but in other periods you don't necessarily see that. So you don't have to see that. But we've seen, again, breadth over the last two weeks has been very weak. The 10-day advanced decline lines have hit their lowest levels in more than a year. for the S&P and the majority of sectors.

And when you see that, that's sort of an internal flush without the market really falling apart. Right. Yeah, you give up one piece at a time as opposed to everything at once. Yeah, and then three sectors are down more than 10% from their highs. So we are seeing some corrections. Yeah. Paul, thank you. Thanks, sir.

See you. Lulu Lemon earnings are out. Let's get to Gabrielle Fon Rouge for the numbers. Gabby. Yeah, so Lill Lemon reporting Q4 revenues of $5.1. On revenue of $3.64 billion. That's a beat on both ends, but expectations have come down over the last few months.

Guidance, however, which is the story here, missed on both the top and bottom lines. 2026 earnings per share are expected to be between $12.10 and $12.30. That's well below expectations of $12.58. I spoke with interim CEO, Megan Frank, just before the release, and she said the company is reducing promotions, which is expected to weigh on sales.

Now, on the bottom line, the biggest headwinds are higher cost. its proxy battle with founder Chip Wilson and tariffs. On a net basis, tariffs are expected to cost $220 million this year. That is up from the $213 million it already cost last year. And of course, Lulu's largest market, the Americas, was down once again during the quarter. It's expected to decline between 1% and 3% on the year. Frank told me the company is aware of the problems it needs to fix

and is seeing green shoots from the first product line from Lulu's new creative director. She said they're still meeting with potential CEO candidates, no news on that front, and she will share more when it's time. Gabby, thanks. Gabrielle Fon Rouge with Lulu. Shares are down 2.8% right now. We've also got results from DocuSan we want to get to. Sima Modi's got those numbers. Sima.

Melissa, four-quarter numbers from Docuysine. Topping Wall Street Smyth's with earnings at $1-adjusted versus the 95-cent estimate revenue ahead of consensus, as well as billings, which came in at $1 billion. So if we look towards guidance now for the first quarter, revenue guidance, above estimates, and if you take a look at gross margin estimates, a little light, but the story here also has to do with a buyback. The company is increasing its buyback program by $2 billion. The company also announcing that an Andreessen GP, Brian Roberts, general partner, has joined the company's board. We're looking at the stock up about 4.8 percent going into today's report.

Shares were down about 48 percent from its recent high that was hit back in August. We'll look for more guidance on the company's earnings call, which should begin soon, Melissa. All right, Seema, thanks. Sima Modi. Let's get now to the concerns in the debt market. According to Bloomberg, a group of banks led by J.P. Morgan halted a $5.3 billion debt deal for software firm Qualtricks International. The deal is said to have stalled after failing to get enough interest from investors amid concerns about AI disruption to the software industry.

Qualtrick existing loans has now slumped to about 86 cents on the dollar in secondary trading earlier today, or Leslie Picker spoke with Orlando Bravo, founder of Toma Bravo, and asked him whether he thought software exposure in private credit was going to be the next crisis. In general, definitely not on Toma Bravo. We, once again, we're not perfect. We have made some mistakes, but that's why our investors are relieved. For the most part, we buy the highest quality software company, and we're known for running them really, really, really well. And we're solid where we are now. Now, there was a lot of excess in the business in general, private equity, private credit, and software in general since 2020, 2021. Some of the issues now in those sectors that relate to software are due to those excesses.

And some of those issues are also due to the interest that generalists had in buying software companies. There are so many cases that we've seen where generalist investors that are good in general have entered the space and have bought software companies. companies that really lack deep franchise value, even though their gross retention and net retention metrics look good. And those companies now have a bit of a more uncertain future with AI right upon us. I thought it was interesting his mention of generalists specifically doing the bad underwriting, doing the bad lending, because there was a lot of money flush into this. And it seemed like everybody and their brother was doing private credit and private equity. And here we are. That's what happens. Things get a little sloppy. And as we keep mentioning, soft.

was viewed as being uniquely attractive to lend to because of these multi-year subscription-based revenues. And this Qualtrick situation is kind of what people are worried about, which is a company with existing debt that was taken private. It's going to need to roll it over. So there is this refinancing bulge that has to be met. And if it's not going to happen by the market today, obviously, that starts to create some hard decisions down there. I don't know that it gets systemic, obviously. We never know that if it really does leak into the banking system or anything like that. But it is, look, it is interesting, and it's going to be kind of prove it. You kind of like prove your innocence, not your guilt. And every little crack is going to be scrutinized.

We did see the private equity names. All those names were hired today. Banks as you did well, so there was some. A little bit of relief. Yeah. Well, earnings from Lulu Lemon out just moments ago, the stock is lower after hours up next. We'll get an analyst's reaction to the results. You're watching Closing Bell overtime. We're live from the NASAC market site. Health care, the worst performing sector today. Eli Lilly was a big culprit. The stock falling as HSBC downgrades it to reduce from hold and cuts its price target to $850 a share. It's about 10% below the current price. The analysts saying the shares are priced too perfection and estimates the total addressable market for obesity drugs right

now are too optimistic. The shares down about $6% to $930. Let's get another check on shares of Lulu Lemon. The after our session, the company is under pressure, beating on the top and the bottom lines with missing on guidance. The company saying Chip Berg, the former CEO of Levi Strauss, will join the board. Joining us now is BTIG's managing director, Janine Stichter. She's got a buy rating on the stock, but reduced her price target from 303 to 250 just last week. Jeanine, great to have you with us. Thanks for having me. You said the risk reward is attractive, but there are a lot of questions. So far from what we've heard, how many more questions are there? Are there more questions, fewer questions? Where do we

stand? I think there's still a lot of questions. I mean, I think the reason we have a by rating here is we think there's a lot of self-help and execution opportunity. This is clearly a company that has a strong brand, but has not executed. I think they're alluding to a little bit of that. You mentioned earlier that they're planning on reducing promotions. I think they realize that there's a need for a better product newness. But we're still very early in that. And the big question we don't have an answer to is who's the CEO. So I think people will take a look at the guidance that they gave and say, great, but we don't actually know who's underwriting this guidance when we're still lacking a leader. The analysts who are bullish and the investors who are

always say that Lulu's got a great brand. But to what extent have they actually sort of chipped away at that brand equity with the product missteps over the years? I don't know they've chipped away. I think that they've almost eluded who they used to be. When I think of Louis Lemon in its heyday, it really was known for being creative and unique and something really different. And I think they lost that fun somewhere over the years, trying to be a little bit too much of everything to everyone.

So to me, they need to refocus, figure out who they are. A lot of that comes back to bringing back technical innovation. That's really where they were rooted and figuring out how they can be special and different when there's a lot more competition in the market now. Is there anything happening sort of category-wide that's an extra challenge in this area? It just seems as if, I mean, you could have said something similar about Nike, for example, right? Where there were new entrants and maybe they let the brand stray a little bit. At the same time, then maybe as a category, people aren't as excited about it.

For sure. I think we are past the peak of where everyone is wearing leggings as their everyday wear, and that's the pinnacle of fashion. But there's still, I think we also have the need to want to be comfortable. And there's a way that they can innovate around that. It might not be leggings. It might be more sweatpants and relaxed fit pants. But there's a way that they can do this, still be a shooter brand,

and maintain the standard that they're known for. Is the total spend in the category still the same? Where has that overall shrunk? I mean, we're always talking about aloe and Viori, taking away, share from Lulu, and that might be happening. But at the same time, maybe people are not spending as much on leggings nowadays. The market is roughly flat. It's a little bit challenging to disaggregate because kind of going back to the earlier point,

there's this meshing of fashion and function where, It used to be very clear, technical apparel, fashion apparel. Now there's an intersection that's more blurred than ever, and I think that's where the opportunity for them is to figure out a way to innovate in this area. What do we think the, I mean, for a time, it was possible to look at sort of how underpenetrated Lulu was in terms of physical store locations and things like that. What about the pace of expansion or its overall corporate ambitions at this point? We think they're largely mature in the U.S.

This isn't a brand that needs to grow double digits in the U.S. any longer. if they can do low single digit to mid-single-digit growth in the U.S., that's great. The growth that we're going to see is from Europe, it's from China, it's from international. So if they can just find a way to eke out moderate growth in the U.S. and then do double-digits internationally, that's still a good growth outgo for them. Two of their cost drivers were tariffs and the proxy battle against Chip Wilson, who got three board nominees? Who do you want to win?

I mean, do you want Chip Wilson to step in and shake things up? Because he said that basically the board has overseen all of these CEO transitions, turnovers, and maybe they're not well-equipped for the same. next phase in Lulu's history? Yeah, I mean, I think we do need some level of outside perspective. I think the question is, does it come from the board or from a new CEO? We're more focused on the CEO right now. I think we need someone with really strong brand management experience. We know that the activist right now is looking at Jane Yielsen, and we like that candidate very much. So we're prioritizing the CEO change versus the board change right now.

Okay. Janine, thanks for stopping by. I appreciate it. Thank you. Janine's Sichter. All right, well, so far this year, energy is by far the best performing sector. In second and third place, though, consumer staples and utilities generally seen as safety plays. Coming up, we'll look at the changing risk appetites in the market among professional investors. Overtown. We'll be right back. Welcome back. Check out Bitcoin and ether today. Bitcoin gaining getting close to $75,000 once again. The cryptocurrencies have had a strong run this month as the Iran War started, ether since Iran War started, I should say, ether is up more than 20%.

Some of the crypto-related stocks, such as Robin Hood, Coin and Strategy, Also, nice runs recently continuing today. All right. Well, we're going to take a look at part of the Bank of America Global Fund Manager's survey today, Melissa, was this risk appetite gauge, which basically asked the fund managers, how much portfolio risk are you now taking relative to normal? Whatever normal is for you. And I like, this goes back more than 20 years. And we see entering the year, we were at this extreme level. And that was, you know, something like 15% on a net basis more than said they were taking less risk.

And I don't think it tells us much at the current level. It's very much neutral. It's not these major kind of bottoms. That was 2022 at the end of the bear market. This was the tariff panic. That's the end of 2018 after a 20% decline. However, I would say, next time we get up here, pay attention. Because this was early 2018 right before really stiff volatility storm and correction.

And that, of course, was the end of 2021 into 2022. So it seems as if when the investors are saying, yeah, we're, running pretty hot here in our own book, you probably want to listen to them. Exactly. All right. Time now for a CNBC News update. Let's get to McKenzie Zagalas for that. McKenzie. Hey, Mel. The House Oversight Committee today said it has subpoenaed Attorney General Pam Bondi for a deposition over the Justice Department's handling of the Epstein files. Critics have continually alleged that the DOJ improperly held back materials during the release of millions of documents. Supreme Court Chief Justice John Robert said today that personal criticism

of judges is dangerous and said that it has to stop. Federal judges have repeatedly warned in recent years about an increase in violent threats. The Chief Justice did not mention President Trump. Over the weekend, the president posted that the High Court has become, quote, little more than a weaponized and unjust political organization. And according to a court filing, Elon Musk and the Securities and Exchange Commission are in talks to settle the regulator's lawsuit, which accused Musk of waiting too long to disclose his purchase of Twitter shares in the run-up to buy.

the platform. The SEC had argued Musk should pay a fine and repay $150 million to investors. Musk has called the reporting delay inadvertent. Melissa, sending it back to you. Mack thanks, McKenzie Segalos. Well, every single stock in the MAC 7 lower so far in 2026. So where can investors look for the next hot thing in tech? Our next guest says the next big winners in tech will be overseas. He'll make us case coming up on overtime. Welcome back to closing bell overtime, live from the NASDAQ market site. Stocks higher, once again today, a very small gain for the Dow. The NASDAQ was up nearly half a percent.

All the major averages have been down three weeks in a row entering this week. Today's gains coming despite an increase in the price of oil, but around $96 a barrel for WTI. Energy stocks, the best performing sector on the day with Halliburton and Baker Hughes, the leaders. Well, Nvidia's GTC conference is underway this week with CEO Jensen Wong, He sees $1 trillion in orders for its Blackwell and Ruben chips. This is hyperscalers continue pouring hundreds of billions into AI infrastructure and buildout. Our next guest says he's bullish on global tech and predicts that the future generation of tech winners will emerge outside of the U.S.

Joining us now is B'Neet Kothari, founder and managing partner at Techni Capital Management with $1.2 billion under management. Beene, great to have you with us. Thank you for having me, Melissa. So what is the primary reason why you're looking outside? Is it the valuation differential that we're seeing outside versus here? Is it where we are in the AI cycle? Can you walk us through? It's where the money is going.

So there's trillion dollars that NVIDIA's customers are going to be spending with them and the trillion dollar build out that the hyperscalers are doing. 90% of that money ends up in Asia. Asia is where the chips are made. It's where the memories supply is made. It's where the robots are made. It's where the batteries are made. That is the supply chain.

They have invested 30 years building that supply chain out. They are sort of ready for this moment. And I think there are countries that stand out like China where the valuation argument also becomes extremely compelling. So you sort of have a confluence of that's where the money is going. And you've got skewed risk reward because the stocks are much cheaper there. You were recently in some of the Korean, South Korean chipmakers have exited out of them. I mean, we saw that sort of flush with the start of the Iran war. And I'm just wondering, where are you cycling that money into at this point?

So I just came back from Asia. I think what's happening in China is still underappreciated. And we all know why that's become less of a focus for U.S. investors. But China has luckily found themselves in a position where they've got a massive lead on electricity and power. So in the U.S., we are going to have something like a 44-gawatt shortage of power over the next several years. China has a 400-gigawatt. spare capacity. They have built in one year 500 gigawatts of power. I think this year alone, they have built more solar power year to date than the entire history of the United States.

So they are sort of ready for this moment. They happen to be, just like Nvidia was never meant to be an AI company. Their chips happen to work well. And I think that's where you can buy data center companies in China, that the entire data center market in China has a publicly market, listed market cap of $10 billion. You can't get anything for $10 billion in America these days. The way you presented it's that Asia is where the infrastructure is going to be sourced. So is this different than saying that there will be a parallel AI ecosystem through deep-seek and all the domestic players there that is worth playing right?

I mean, how does it fit into the whole global picture? There's the digital layer, which I think America leads on. Yeah. Then there's the physical layer. Ultimately, to create value, to create economic surplus, it has to get converted into something usable. So I think one of the things America and the hypers here are obsessed with is AGI, which is sort of abstract and endless debates about when and what does it look like. In China, or in most of Asia, they're obsessed with ROIs. They're in a bare market over there. So the only thing that matters is how can we make money? So they're focused on robots and robotics. They're focused on these manufacturing

buildouts. They're building the physical layer. I think on top of that, they are also capturing a lot of the spend that comes out of the semi-market. I think there's both spillover from the digital layer and then there's the physical aspect.

There's something additional that's important, which is China is very likely to do with AI, what it's done with every other sector, which is overbuilt. They overbuild EVs, they overbuilds, they overbuild solar. They've overbuilt factories.

That generally ends up in all the other nations around the world, right? The Global South, 4 billion people. We think it's very likely that China overbuilds AI, and that creates economic surplus for all these emerging market countries because they're going to export it out. You know, you could buy a $10,000 BID car in Brazil just like that. And a lot of that came out of oversupply. They made too many EVs for their population.

The same thing's going to happen here. That's down the road, right? Yeah, that's going to happen. And it's going to be massively deflationary, but also massively bullish. You know, Brazil and India's and the Vietnam's of the world probably can't do what China can do, and they're going to just be able to buy it from China on the cheap. Some of your holdings, top holdings, DD Global, which is like the Uber of China, Kanjun, B-E semiconductor industries, GDS.

So a lot of picks and shovels here in terms of where you've seen the life. Yeah, you know, in the U.S. with the Mac 7, you've got a 20, trillion-dollar concentration problem, and there's some cracks happening. Over there, you can buy the beneficiaries, the picks and shovels, at half the valuation. So do you think, I mean, is the corollary here that those leaders of the NASDAQ are kind of capped out here, or that they're just not valued right for the opportunity? The risk reward is not skewed. They are probably within a 25 percent band of fair value, up or down, sort of depends on what happens at the Fed on a given day and so on and so forth. But you're sort of seeing it with Envidia. He comes out with

these massively bullish numbers and stocks where it was probably six months ago. Over in China, over in parts of Asia, you saw what happened in Korea over the last year. There was a little spark and the index went up 100%. You've seen that with Japan, we have some stocks in Japan that on the year were up 100%. So I think the risk reward is extremely skewed. Last quick question. Are you short any of the U.S. major tech companies? No. I think they're not overvalued. I think they're within a band of fair value. All right.

Be neat. Thanks for coming by. I hope to see you soon. Thank you. Thanks, Mike. Be neat Kathari. Amid the recent market volatility, Ned Davis research is cutting its exposure to equities.

Up next, the company's chief global investment strategist tells us what is behind that move and where he sees opportunities right now. And at the end of an era again for Disney CEO Bob Eiger or look back at how the stock is fair during his second time running the media giant when overtime returns. Welcome back to overtime, two major media CEOs in the spotlight today. According to a new football, filing, Warner Brothers Discovery CEO David Zazlov could be making as much as $887 million from selling his company to Paramount Skydance. More than 600 million of that would come from

various stock awards, but he could also potentially be reimbursed for a federal golden parachute tax that could send the total payout to well over $800 million. Since becoming CEO of the company created by the merger of Warner Media and Discovery four years ago, the stock has jumped roughly 20%, although most of that gain is a result of the bidding battle between Netflix and Paramount. Meanwhile, today is Bob Eiger's last day as Disney CEO, and it's not the first time we've said that since it's Iger's second time, of course, as Disney CEO. He's being succeeded by Josh DeMero, who is most recently the chairman of Disney Experiences. Since returning to replacing Bob Chepec in November 2022, Disney shares have increased by just 9%. Yes. I mean, the backdrop

for all of that is obviously legacy media in a tough spot. You have a company, Disney, whether parks are doing fine, but you're leveraged to in-theater box office plus linear cable. So it's been rough. It's all depend on like when you start counting in terms of whether you evaluate whether somebody's added or subtracted value. Right. And you take a look at his first term. Yes. You know, I'm assuming that he wants his legacy to really be founded on that with some transformative M&A, which really was a departure from Disney's sort of style prior to that with Michael. Eisner. I do think it's worth remembering when he did get the job in 2005, I guess. Disney was considered kind of like, you know, directionless, and it was a huge fight with Michael Eisner.

And the whole idea of entertainment franchises, that kind of was an Iger thing. Yes. Like, we're going to cross-sell this stuff. He bought Lucasfilm, as you mentioned, Pixar, Marvel. Now, I think almost everybody would agree that Disney overpaid for the Fox studio assets, but almost anybody would have bought it, and Fat Comcast tried. So it's one of those things where and maybe there weren't that many easy answers out of the trap of declining. And in the end, it did get Hulu, so maybe that helps with the string of business, right? Over time, we'll see if that does pan out. While airline stocks, among the big winners on Wall Street today, after both Delta and America

hiked their revenue guidance, Phil Laveau spoke to the CEOs of both carriers. He joins us with the details. Hey, Phil. Mike, a day of positive comments from airline CEOs at the JPMorgan Industrials conference. We're not going to run down all of them, but this is basically the message we heard across the board during all of the presentations here today in Washington. First of all, yes, fuel costs are rising. And we'll show you how much in just a little bit. But there's two base fare increases that have taken place that has taken a bit of the sting out of those fuel costs increasing.

And there is stronger than expected revenue. That's the big takeaway from today. Talk about Delta. You mentioned earlier that they've increased their guidance when it comes to revenue. Listen to this. Delta CEO, Ed Bastion told me this morning, bookings are up 25 percent. in the last couple of weeks versus the same time last year. American Airlines, when we talked with Robert Isam, he told us that Q1 revenue is up. It is expected to be up for the first quarter, more than 10% compared to last year. And yes, that's an increase compared to its previous guidance. Similar comments from Alaska, JetBlue, Southwest, and United, all seeing strong demand

both domestically as well as internationally. And we mentioned jet fuel prices. Yeah, they're up about 79% year to date. but it's the crack spread, guys. That's really where that's hitting the airlines hard. It's not just that fuel or oil prices have risen. It's the crack spread for the refining of jet fuel. That's really what's hurting the airlines.

But so far, it has not slowed down demand. Did they talk about how much diesel prices would have to go in order for it to be then reflected in the airfares and at what point they start getting concerned? Well, it's already partially reflected. What you're asking, Melissa, is how high do airfares have to go before we start to see some drop in demand? And nobody's going to get a percentage out there. I think that we continue to see some airfare increases here over the next several weeks,

especially if you see elevated jet fuel prices. Clearly, the consumer so far has said we will continue booking, both leisure and corporate. And by extension, Phil, I guess nobody's really getting scared away by the, the reports of very long security lines and all the rest? No. It's frustrating. The airline CEOs have said, look, this is ridiculous. And I don't think anybody would argue that this makes sense that the TSA agents are not being paid because the Department of Homeland Security is not being funded during this government shutdown. They are optimistic that something can be worked out relatively soon. But nobody's putting a timeline on this. What you're going to see, guys, continued flare-ups around the country,

what the TSA calls hot spots where agents have decided they're either going to quit or they're calling out because they're not getting paid and they're not going to have as many TSA agents there. And there's no way of predicting where that's going to happen. It's happened to Houston, New Orleans, Atlanta on a fairly regular basis over the last week or two. And it may be other airports. There's no way of predicting it. Are any of the airlines seeing any impact on demand for international travel given the conflict in the Middle East? No, not, and you would expect that, Melissa. We specifically asked both Robert Isam and Ed Bastion, are you seeing people deciding we're not going to fly transatlantic for whatever reason?

That's a good region to focus on. Neither of them have seen any drop off in demand. Phil, thank you. Phil LeBow. You bet. All right. Our next guest is cutting his holdings in stocks and moving that money into bonds instead. He'll explain that move next on overtime. broader markets. Ned Davis Research, turning a bit more cautious, downgrading equities to a market weight.

As volatility picks up and breadth weakens, the firm is shifting money into bonds, pointing to a spike in the VIX that historically has been part of a warning sign for stocks. Joining us now for more on this market call is Tim Hayes, Ned Davis Research Chief Global Investment Strategist. Tim, it's good to talk to you last week caught up with you. It felt like a lot of your indicators were kind of hinting that you might be moving in this direction. So what of your models generated that caused this move? Well, that's right. And what has happened since then is a breadth indicator based on how many markets around the world or above 50-day moving average has really reached its lowest levels since April of last year.

We've also had two other indicators give us warnings. And these indicators are all in our global balance account model, which is something we really want to pay attention to when you get into these periods of volatility. and, you know, no shortage of uncertainty about the war and oil and inflationary impact and so on. So, you know, we're going to pay attention to our indicators. Half of them are priced-based. The other half are based on we call non-price factors. So are we seeing defensive relative strength?

Are we seeing a sentiment, a reverse from an extreme? That's a signal we have gotten. So those two indicators have given us a warning. And other indicators are getting pretty close based on earnings estimate revisions. Those have started to roll over. Option adjusted spreads. The indicator has started to indicate that credit spreads are starting to become, you know, reflect the private credit concerns.

And that indicator is getting close. So our approach is, you know, we're going to market weight, and, you know, we don't rule out the possibility that, you know, the war ends will come down, volatility comes down again. And this happens before the damage has become severe in terms of inflation and interest rates. That can't be ruled out, but we also definitely can't rule out the negative potential for yields to break out, say, about 5% on the 10-year Treasury. Inflation expectations continue to rise. This starts to have a bigger impact on earnings expectations, and we start to see an impact on consumer confidence and savings,

and the economy then starts to show signs. of this impact. So until that becomes more clear, our approach is to stay. Marketway, you know, definitely, you know, take some chips off the table and let's see how this develop. If we are going to have a positive outcome, then you would expect to see this breadth of the market become much better. So the market broads out. You get what we call a breadth thrust volume on the upside, stocks making highs broadly, and not the kind of market we've been seeing here the last few months. Do you feel like screaming at the TV, though, Tim, when you hear so many people say the markets are very calm,

you know, at the index level only less than 5% off of highs, and yet you're seeing all these indicators by your measure rolling over. Yeah, I think what it suggests me, and one of the points I made is that when you get above 28, that is a warning sign. And what we saw in 21, 22 was the VIX, you know, kind of kept making higher highs as the market deteriorated. And you really, if you're going to get to that kind of panic bottom, you need to see levels we found around 44 under the VIX's when it typically get a kind of panic extreme. But, yeah, I think that to me is a concern that you really have not had a capitulation that you might expect given the environment we're in now. And if it gets, you know, if this lingers on like this, and as like you said, bond yields are pretty important to watch,

they break out. Then that could change things, and the model could very well move us. to go into cash. In fact, that we run our indicators on a daily basis, and the bond cash composite, what we do in our model, it's stock bond composite, combined with the bond cash composite, and that's been starting to move more toward cash, as bond yields have started to give us those signals that you want to be shortening duration. Yeah, and we are showing that market weight, for you guys, 55% equities, 40% bonds, 5% cash. You mentioned it's a global model, and so therefore you're looking at the behavior of all

world markets, is anywhere around the world distinguishing itself as looking at all better than others? Well, we've been making the case for some time that emerging markets, you know, are really where we're seeing the strengths, and especially the emerging market ex-China. And so that takes out some of those big tech stocks have been caught up in the tech profit-taking. So emerging markets have held their own pretty well, despite all the uncertainty. right now and they're still outperforming. So that uptrend remains intact. And we're remaining overweight emerging markets and we're underweight to U.S. has been in a long period of

underperformance, really since the fourth quarter of last year, even going back earlier. Tim, great to get the update. Really appreciate it. Tim Hayes, David's Research. Take care. I thought it was interesting because talking about the spike in the VIX. Yeah. I'm thinking, what spike? What spike? We've only seen it up a 28. Right. Exactly. Right. And then it came right back down. But it was there.

All right. Let's get you set up with tomorrow's trade today. It'll be a big day on the economic calendar with the Fed's latest decision on interest rates, a February producer price index, and the January factory orders report. And Micron is a headliner on the earnings front, along with Macy's, General Mills, William Sonoma, as well as five below. And speaking of earnings, let's check on the companies that have reported results. After the bell, we got Lulu Levin beating earnings in revenue, no updates on CEO's search so far,

but adding that former Levi's CEO, Chip Berg, is joining the board. that stock is down by one and a quarter percent at this point. Doccissan also beating on both the top and the bottom lines, first quarter earnings guidance slightly above the current consensus. The company also announcing a $2 billion stock buyback. The stock is off of its after hours highs, but still higher by about 2%. And check out Bob's discount, furniture, falling after its first report as a public company.

We're not comparing the numbers to estimates due to limited analyst coverage of the company. The company went public on February 6th, 17 bucks a share, 14 change right now. Gotcha. Yeah. Big day tomorrow. Yes, of course, Fed meeting tomorrow. Yeah, and you know, the bond market and Micron is right, sitting right at that level 420 that's been a little bit of the demarcation line between a problem and not.

That's going to do it for overtime. Fast money begins right after this quick break.