Closing Bell - Closing Bell Overtime: Tech Rally Debate: Is This Time Different? 5/11/26

Episode Date: May 11, 2026

Markets wrestle with a powerful tech rally and potential skepticism around AI. Daniel Newman of Futurum Group argues the tech trade still has room to run while David Snyder of Journey 1 Advisors warns the AI bubble is set to burst. Our Meghan Cassella previews a key China-Xi meeting and highlights the CEOs planning to attend in Beijing. Then our Kristina Partsinevelos breaks down the upcoming Cerebras IPO and what it means for the next wave of AI infrastructure players. Chris Verrone of Strategas explains why the market continues to melt up but shows early signs of strain beneath the surface from a technical level. 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 an end to the trading day at the NYSC, darling ingredients and at the NASAC form factor. See you, Mike Schleser. I'll speak with him coming up on fast money. Welcome to closing bell overtime. We're last in studio be at the NASAC market site. I'm Melissa Lee along with Mike Santoli. Sox with small gains today that down up less than 100 points.

The SB 500 gaining a 10th of a percent. The NASAC up just barely, but adding onto a record rally more than the market straight ahead. And the big question we're going to be asking throughout the hour, does the AI rally still have legs or is it a bubble about to pop? We'll also look at a couple of areas of concern. Consumer weakness, continuing, and a technician is going to be looking at the potential cracks in the bank stocks. And, of course, we've got some earnings reports due out at this hour as well. We'll get to those as soon as we have them.

But I feel like it's a broken record. You know, it's quiet on the surface. But, again, we're seeing new highs in a lot of the memory names and the chip names, Envidia, Siegay and Micron. A deeply bifurcated market. And it is almost now narrowing down to semis versus the rest. So you had the indexes up gently, weak breath underneath it, also oil up, also treasury yields up, also the volatility index up. So it tells you the market is maybe sort of modestly clenching up in advance of maybe we're not sure if this kind of can be pulled any farther here in the near term.

So I think that's one thing to keep in mind. Positioning probably getting pretty full. Strategists are chasing it. A few of them raising their S&P targets because they were left behind in the rally. On the other hand, earnings are still moving in the right direction. the stocks going up the most, have the best earnings revision. So you have this bold case that it's fundamentally anchored and also overall S&P valuations are not back to where they were late last year. So, you know, I guess you kind of pick your relevant data point there. I mean, the political rhetoric

at the beginning of the day, at least, you know, Trump's saying effectively that talks with Iran on life support, you would think that WTI would move more. But, I mean, it's seen well under 100, like firmly under 100 the entire day, no bit above that. It feels a little bit like we're in this period where until Trump and she meet, we may be sort of in this limbo where our upside's not going to be great, but our downside isn't going to be either. Without a doubt, the market is, I think, leaning on this idea that all the incentives go in the direction of reopening at some level, and in fact that the downside would be significant if there was a new term reopening. And also, we're not making new highs. And as long as we don't make new highs and crude, yeah, the consumer

stocks definitely suffer, but the rest of the market can seemingly handle it. All right, well, as we mentioned momentum continued today for some hot stocks. Let's bring in Sima Modi for more on those. Hi, Seema. Mike and Melissa, the rally and chips seemed unstoppable with the I-share semiconductor ETF, seeing back-to-back gains with Intel up another 6% on the day. Actually, around 3.6% at the end of the day on more reports of new customers. InVIDIA also closing at a record high. So joining in on the fun, more evidence of memory shortage, sending shares of Samsung, Western Digital, and Micron higher on the day. Get this, since the end of March, micron shares had more than doubled a pretty phenomenal move. Now, in Software Monday.com delivered its biggest revenue beat in 15 quarters,

started the day higher by around 25%, but ended the day well off the highs by around 6%. This, as the market counts down to U.S.-China talks in Beijing. And one of the key questions is how Iran will be addressed in these talks between President Trump and President Xi Jinping. You guys were talking about oil prices higher after Trump rejected Iran's counterproposal and said the ceasefire is on life support. WTI trading at about $98 a barrel while we saw international accrued at around 104. Energy was in fact the best performing sector today with Exxon, Chevron, Conoco Phillips, all climbing between 2 to 3 percent on the day, Melissa. Seema, thanks, Sima Modi. It has been an intense rally for tech stocks. The NASAC up 140% in

the chat GPT era. But while many on Wall Street are worried when the rally, will end. Others, say, recent earnings reports show there are still plenty of demand out there to keep it going for years to come. Joining us now is Daniel Newman, CEO Futurum Group. Dana, great to have you with us. Thanks for having me. There's a narrative going around that what we're seeing is just like the dot-com era. It is a bubble that is waiting to burst. How do you counter that argument and say that it is different this time around? Yeah, a lot of the experts that have been around for many decades will say they've heard this is different every single time. But this one really is different. And I'll give you just the simple, for instance, the memory cycle.

Everybody knows the memory boom-bust cycles that take place. It was all based on consumer handsets and PC demand. And we knew when it would peak and we knew that it would come to these trials and that essentially there'd be these huge falloffs. AI is completely different. These agentic workflows, you keep hearing about agents entering AI. They are going to create so much demand that every single one of these agents is going to be pulling demand. And invidia, broadcom, intel. We're going to see so much more need over the next few years.

It's not even going to be close to what's happened in the past. So it's really early. And I think that's the other problem here is a lot of people feel like we're late. I saw an interview on the other day said we're in the third inning of AI. I would argue we're actually in the parking lot right now. We're making a hot dog. We're having a beer. And we're getting ready for the pregame.

We are so early in AI that people think we've missed the rally. Micron's trading it, what, eight times forward right now based on its estimates. It is not late to get into AI. And by the way, the whole bubble thing, we've been wrong every part of the way, Melissa, for the last two years, we've been hearing Michael Burry and everyone get on say, it's a bubble, it's a bubble. What's in video trading at? 17 times with a trillion dollar order book.

I just think people want it to be, but that doesn't make it. So a trillion dollars in AI CAPEX next year, so we're 3% of GDP next year is 10 companies building data centers. What's the third inning look like if we're 3% of GDP next year? Well, I mean, how big is this going to do? It's going to consume all the resources in the country. Well, we certainly have an energy problem. and we have constrained every part of the supply chain. And that's been what's driving and fueling this rally

is that people say, oh, you know, is memory over price? Well, look at what the expected earnings are for Sandisk for Western Digital for Micron. And even just, like I said, look at Nvidia. Invita is the one that I keep saying, like, if you're nervous, if you think some of these things are wrong, people say, oh, there's not a free cash flow being generated from some of these companies.

What about Nvidia? It's been well behind the rally. I know it just hit an all-time high today, but I mean, as you've seen these stocks triple and quadruple, Nvidia has gone up what? A handful of percentage. It's trailed in the rally. I think that people continue to want to see that AI is not going to, you know, it's not going to hit. It's not going to land. And then you have anthropic. It's revenue, what, tripled in a couple of months. It went from, you know, 10 to 38 billion and 1.4 trillion valuation. The demand is what's driving this. And the supply can't

meet the demand. And when you have both of those things happen at the same time, you can have a rally that can sustain. I get the argument about constraints, constrain. on compute, constraints on chips, et cetera, et cetera. How about constraints on capital? J.P. Morgan just had an estimate out $457 billion in debt. And not all of that is even the big cap tech stocks. Some of it is also just the amount of debt that meta has to raise in order to lease data centers.

Is there a limit to that? Are we going to come to a point where you're not going to get the funders to this boom? Well, I think it starts to be more about being selective. To your point about, you know, as we get further into this rally and we get further along, You have to look at the company and say, which are the ones, you know, you look at the hyper-scalers, Google stood out above Microsoft, above Amazon and definitely above Oracle, despite the fact that I actually believe that the demand will grow into all of them. Why would you pick the company that's not the one creating the most cash?

Right now, Meta has a cash machine in its core ads business, about $60 billion of revenue that's impacted by AI. They have a product, but they are spending a lot because they have to build all this AI for themselves, which is different than, you know, a Google or a Microsoft that sell their services onto others. But having said that, we can be stock pickers here. We can actually pick names like NVIDIA, like Micron, like Google, that have the cash flow in their businesses.

And it might be a little riskier to get into some of these names that people are chasing right now. You've got some of these names like Astera Labs and you've got some of these names like AOI, you know, that people are just running into and they have great growth ahead of them. But are they going to continue or do you pick something a little more conservative? So you are worried about valuations within this, what some people are saying is a bubble. Well, I think that you can look at the situation and say there's companies right now that you can say are going to benefit from the constraint. They're absolutely going to continue to sell. They're going to generate free cash flow.

And then you have companies that are speculatively going to be able to be successful as long as the revenue keeps going. If I'm an investor, I would always want to pick out of the first bucket, but you may miss some of the rally in the near term because clearly the exuberance is here. The demand that we isolate in terms of the hardware food chain, I mean, that's pretty definitive. and we have the backlogs. If they stay there, then they're fine. But what about the end user demand and whether it's cost effective for them to keep burning through all these tokens?

Spotify last week said, look, it's starting to pinch our margins. We have massive experimentation going on in AI, and maybe we can't afford it if it grows at this pace. Yeah, this is one of the most interesting moments right now is the normalization. We've had a ton of subsidy

as we've gotten anthropic and open AI. We're getting tokens at this extremely low rate. And we've heard that before. Like, if tokens normalize and the prices start to go up, and companies start to use this stuff at great scale, what is the real cost and what does the real bottom line mean for companies implementing? And this is also why I think that whole software sell-off, it's overdone.

Because what's actually going to happen is you're going to see software, enterprise software names, trusted names, ServiceNow, Salesforce. Companies like that are going to end up partnering with companies like Anthropic and companies like Open AI because the bottom line is we are not going to build on this open, limitless use of tokens. Because when the pricing becomes what it's going to be, you will see the revenue scale up, but you will see costs start to impact. Bottom lines don't make sense. Companies have to be profitable as they implement AI. Daniel, good to see you. Thank you. Thank you. Thank you,

Dr. Newman. Well, not all investors. As enthusiastic as Daniel Newman at this tech rally can continue, Michael Burry, his name was just invoked. In fact, repeatedly today, he of the big short fame writing over the weekend, quote, for any stocks going parabolic, reduced positions almost entirely. Also on Sunday, closely followed analyst Julian Emanuel of Evercore was out with a note saying similarities to 1999 are rising as stocks post-record momentum off the March 30 lows. These warnings aren't new. Bridgewater founder Ray Dalio saying in November, the picture is pretty clear in that we're in that territory of a bubble, Dalio said, but we don't have the pricing of the pricking, excuse me, of the bubble yet. We still haven't. And a month before that, in early October,

Toma Bravo founder, Orlando, Bravo saying valuations in AI are at a bubble. So check out the performance of the NASDAQ since those comments from Bravo up about 15%. The chip, CTF, the SMH is up nearly 70%. So how should investors behave while this bubble debate plays out? Joining us now is David Snyder, Journey 1 Advisors Managing Principal and CIO. He was known as my long-term mystery broker source dating back to 2009 when I was at Barron's. Dave, good to see you. Thanks for coming on. And look, you're pretty convinced that this AI theme is tracing out the latter phases of a major bull market. It does seem like it's a treacherous bubble. Give us the bottom line on that. Well, I mean, it is very,

I mean, very similar to what happened in the late 1990s. You know, I was thinking about this when we were talking the last time is that in the last five years of a secular bull market, the last two, from 49 to 66 and from 82 to 2000. The last five years were a revolutionary new technology took over, and you had very little market breath. It completely was just one exponential growth. And really, it's not the technology. This is what really important.

It's human psychology and response to the technology. So three things happen. So the corporations that are developing, it and using it, become very enthusiastic and over-invest. And they also are fear of losing out, phomo. So they have two psychological responses. Investors respond the same way. They become over-enthusiastic.

So it really doesn't, it could be any, it doesn't matter how good the technology is. It's just human nature. You're never going to change human psychology. So this is just classic end of secular bull market. psychology. I mean, you have, you have, um, just, the market breath has just been terrible for the last five years. You know, every time the market goes down, everybody says breath's picking up, but it's really only because the tech stocks are going down. Um, you know, on the, you know,

the previous guest talking about micron, uh, you know that we had a whole, you had a high profile investor a few years ago, said there's never, they're never going to lose money again. Uh, they, In 2022, they made, I think, 10 billion. In 2023, they lost $5 billion. So it happened so quickly. It's a very high, it's probably the most, the most cyclical company there is. Does it matter, though?

I mean, Micron's price earnings ratio is still the low market multiple. And a lot of the companies that we're talking about that are, I mean, I get the whole thing about human nature. It does not change. It's again and again cycle after cycle. but the companies this time around are very different. They have a lot of cash. They are profitable companies.

I mean, that would be the argument against it. Okay, so semiconductors is the most cyclical part of the S&P, and Micron is the most cyclical semiconductor stock. So the problem, the market can see this. So that's why Micron never in the history of the company, even when they're earning, it's a classic cyclical. company where you trade at the lowest P.E. When their earnings are peaking, you want to buy those stocks actually when they're losing money

or when they have high PEs, just like a chemical company or a car company like Ford or GM. So it's actually the reverse. You don't want to own Micron at six or seven, eight times earnings. The market is sniffing it out. They're saying earnings are going to peak soon. So that has happened over and over again in Micron's history. and they go through these incredible boom and bus cycles. And I disagree with the past guest also.

They're not just a consumer company in the past. Yeah. So they've been exposed to other areas as well. So I definitely disagree. But the big thing, like, is the seven conduct, people say that the valuations on tech companies are much lower today. But here's the problem. Semiconductors are now 17% of the S&P.

And they were much lower in 2000 as a percentage. So it's going to take a bigger. hit and semiconductors are the most sickle-up of companies and their earnings are going to, they're earning, do you know that their sales went down 43% from 2000-2002? Yeah. Earnings went down 85%. So if you have like a fifth of the market, if it happens again, just by the semis themselves will cause the market.

Sure. We're just watching here, the closing bell at C-Bell, by the way, as options trading finishes up for the day. Dave, you've mentioned a couple times the end of a secular bowl market. So you basically are taking this from 2009 up to this point. there's been some echoes of exactly how long and how rewarding this bull market of bit has been relative to ones in the past. So you're kind of looking toward the very end of that. Oh my gosh, it's so closely parallels. I mean, we've had 17 years of 15% real returns on the

S&P. That is exactly what we had in the past two secular bull markets. To the T, almost the exact same time frame, the exact, as we know, the long-term average is 6.5% on real returns for the S&P annualized. And we've been doing 15% a year for 17 years. And anybody, you don't have to be a math expert to know. If you do 15% real returns for 17 years, the next 10 to 17 years, either have to be zero to negative to get to that long-term average. And this has played out the exactly same way. We had, you know, P.E ratios went from 9 to 20. We had, you know, the last five years, you know, in the late 60s, it was the mass production of integrated circuits. It was Moore's Law came out in 65, and that was, you know, incredible new birth of the new industry.

And then in the late 90s, the same thing. So the last five years, you have this new revolutionary technology, and you have, and then in the very end, both in the late 60s and in the late 90s, you had a parabolic move in semiconductors. Back then you had Fairchild and, you know, the semiconductor back in the late 60s, you know. And so, and the other thing I go against is, you know, valuations. Well, it's more NASDAQ went down 80% because of lower valuations and earnings. And earnings played a bigger part. Right. So let me give you an incident.

Texas Instruments during the 2000, 2002 bubble burst. Stock declined 87%. Their earnings declined 80%. So most of it, Intel, their stock declined 66%. Their earnings declined 66%. Yeah. So I guess my point is that this time you have more, oh, and also, go ahead. Yeah, no, I get you.

So you have both peak earnings and valuation access. And I guess I would also just quickly know it's three and a half years since chat TPT came out. So if it was the final five years, you know, who knows how loud the clock is ticking, Dave. I really appreciate it. We got to leave it there. David's not. Appreciate time. Thank you very much.

Thanks, Michael. All right, Hems and Herds Health. Earnings are out. Angelica Peebles has the numbers. Hey, Mike. Well, it is a miss for Hems. The company is a Q1 revenue coming in at $608 million versus the estimate of $617 million. We also see a loss of 40 cents a share.

We are not comparing that number. They are raising their full year revenue guidance, but they are actually tweaking their guidance for their adjusted EBITDA. And that number, the new range is $275 to. to $350 million versus the prior guidance of $300 million to $375 million. And that's also coming in lower than that estimate. And, you know, it's really important to flag here, guys, is if you remember last month, they made this strategic shift where they said, we are not going to advertise compounded GLP-1s anymore in order to start selling the branded GLP1 drugs from Novo Nordisk. Remember,

those two got in a really messy fight. And in doing that, they said that it's, you know, going to help in the long run, but it could be some short-term pain. So you're seeing that play out here in this quarter. Gross margins down in this quarter, 65% versus 71% that the street was looking for. And so it'll be really interesting to see how this plays out. And we'll come back with any more headlines that we get out of that call later, guys. All right. Angelica, thanks, Angelica Peebles. Up next, President Trump inviting some famous friends to join him in China, plus the latest on peace talks with Iran. You're watching Closing Bell overtime, live from the NASAC market site. Welcome back to closing bell overtime.

President Trump is heading to China this week, and he's asked a star-studded list of CEOs to come with him. Let's get the details from Megan Gisela in Washington. Megan. Hey, Mike, so a White House official shared this morning a list of more than a dozen CEOs. It says we'll be traveling with the U.S. delegation to Beijing. So take a look here. Big names on this list include Tim Cook, Elon Musk, David Solomon of Goldman Sachs, Larry Colp of GE Aerospace, clearly a range of industries being represented here.

You see Boeing, Cargill, Micron and Qualcomm, Meta as well. And the expectation is that each of these executives may be signing some sort of an agreement with China. We don't have much by way of specifics on that as of now. But the White House has said to expect deals in the aerospace, energy, and agricultural industries to come out of this trip. Now, President Trump is set to arrive in Beijing Wednesday morning, Washington time. He'll have two full days of events with President Xi. And the agenda is broad. It's expected to cover trade, AI, export controls, Taiwan, and

the Iran war. But guys, Iran is likely to dominate with the U.S. and Iran talks at something of a stalemate right now. We are expecting President Trump to pressure Chinese President Xi to try to get the Iranians to agree to some sort of a deal. So at least one thing to watch in addition to all those deals. Guys. There is also some pressure, Megan, on the parts of some senators and congresspeople today to get some sort of backing for basically signaling that we are backing to Taiwan. and that we would back them with weapons and to the fullest just to sort of reassert the notion that we are for an independent Taiwan. How's that gone over?

I'm guessing not well. Not super well. The president himself was asked about Taiwan and he did say that it would come up. He said it always comes up when he talks with the Chinese. A senior administration official did tell reporters not to expect any change in U.S. policy. It's not clear, though, exactly what angle President Trump is going to take on that. What it seemed like when he was asked about it today was that it was that it was. sort of at the bottom of a list of a number of issues. So we said, yes, it always comes up.

He thinks President Xi will be bringing it up more than Trump himself will be bringing it up. Of course, they'll address it. But again, no shift, at least in the stance. And specifically on Iran, Megan, what is the latest on the ground there? It's been a monumental day. Of course, we had that response the Iranian sent overnight that the president rejected as totally unacceptable. He later called it a piece of garbage. And it's interesting to see these two hugely consequential challenges of Trump's presidency moving forward at once. First, he said it was a piece of garbage. But then he said that the ceasefire was also on massive life support.

That was an escalation from the president. He said it in the Oval Office today after seeing that offer from the Iranians, which did show some red lines for the U.S. And, you know, it comes, Melissa, after last week, we spoke several times about how the bar seemed to be quite high for U.S. officials to say that the ceasefire had violated. There was a skirmishes, a number of skirmishes back and forth with those attacks. And Trump administration took great pains to say that doesn't rise to the level of resuming military operations. But today from the president, the quote was that it was on massive life support. He likened it to one percent chance of it surviving. So, you know, at least some escalation there in the rhetoric. I will say, though, that even though he made these remarks, the bar does still seem to be

pretty high, especially as long as he's in China. We don't expect there to be a resumption of military operations. And even potentially after that as well, the focus is still in negotiations and even on trying to pressure Iran economically. And we did see Treasury release more sanctions today, but at least wanting to escalate that rhetoric while still focusing on the talking aspect of it. Yeah, markets seem to want to take it in that context as well, Megan. Thank you very much. Well, another record for semis today, the SMH making an intraday high for the 16th. time in seven sessions. Up next will take a closer look in an upcoming IPO, hoping to cash in on the chip crates. Welcome back. Cerebra's systems expected to go public this week and now expected

to increase its IPO price range as demand for AI chip stock soars as much as the demand for the chips that they make. Let's bring in Christina Parts-Nevilus now for more on Cerebras. What are we looking for? Okay, first, trading's going to begin on Thursday here at the NASDAQ under the ticker. CBRS, and demand has been very strong for this company, so the company actually just upsides the deal now looking to raise up to $4.8 billion. So what does Sarah Bross do? It does build AI chips, but they also offer full systems designed to make AI responses faster, the inference stage.

Its key advantage is that they offer this wafer scale chip that keeps memory on the chip using S-Ramp. That reduces bottlenecks. We keep talking about with supply issues with high bandwidth memory and really speed. leads up the inference process when AI models respond in real time. Margins are a watchpoint according to the S1. Gross margins are just a little bit shy of 40%, which is considerably low for semiconductors. But this, I'd like to point out, it's not just a chip company.

Sarah Brass sells systems and cloud infrastructure to roughly about 25% of revenue. So the economics are just a little bit different when you're comparing specifically to Nvidia or to other chip names and you look at their margins. Competition, intense. Invidia definitely dominates. But Sarah Brass is targeting ultra-fast inference already working with OpenEI, AWS, Oracle, IBM, and META. But the biggest risk is a customer concentration. Much of its revenue actually comes from the UAE-linked players like a G-42.

It still relies on a small group of just large customers. If this IPO pops, though, it really could test the appetite for the next wave of AI infrastructure, of course beyond Nvidia. Polymarket right now is projecting Cerebrus to close above $50 billion market. cap by the end of day one, that would be 100% above target, target valuation of about $26,000. Why don't they have more share here? Why are more companies using this? I mean, it's faster, right? Cheaper. I think it's the production. How do you get these chips out fast enough? Their capacity constrained. They haven't, they had not come out and said that. So I can't paraphrase there's anything like that, but that is my assumption just based off of the entire market.

If every single chip company to the likes of even AMD, much larger market cap, well known, utilized by everyone, still can't even get the capacity at TSMC. And wouldn't we assume a chip company like this would have almost a very similar issues? So are their chips or are their systems integrated into other platforms or is it just like you go with that? So they're working. They have partners and their cloud systems are integrated with, they're saying with AWS and all of meta, et cetera. But that's actually an open AI. We'll be also using their chips on the second part, the hardware part. I'm not sure if they're going to be using both the hardware and the software for open AI. But they're going to push that that's going to be the next major revenue stream and will offset all the Saudi money because it is highly concentrated in the UAE.

Who makes their chips? I don't have your answer for you. Okay. I would just say, yeah. They design them. Yeah. Okay. We have a couple days.

I should know. I'm blank right now. Christine, thank you. Christina. Thank you. Time now for a CNBC News update with Sima Modi. Sima. Melissa, the Supreme Court today extended its pause on a lower court decision that blocked

male distribution of the abortion pill. The FDA expanded access to the pill during the pandemic, dropping the requirement to physically meet with the doctor. Louisiana sued and an appeals court sided with the state, but the Supreme Court issued its initial state last week. In other Supreme Court news, the state of Virginia, asked the justices to intervene in its redistricting fight. Last week, the state Supreme Court struck down a voter-approved congressional map that favored

Democrats. It comes amidst the continuing nationwide battle between Republicans and Democrats to gain an advantage in the midterms. And the last six passengers aboard the Honta virus cruise ship evacuated today on an island off the coast of Spain. 19 crew members and three doctors were also expected to fly out today. The ship is then expected to sail to the next. Netherlands where it is based so it can be fully disinfected. Three people died since the start of the ship outbreak with that World Health Organization saying today that there are now seven confirmed and two suspected cases. Mike, back to you. All right, Seema, thank you. Stocks continuing to set

records, the S&P 500 closing above 7,400 for the first time today. But up next, are we looking at possible cracks? And one area of concern has been the consumer. Check out some of the stocks hitting 52-week lows today. A lot of stuff we buy. Lulu Lemon, Dominoes, McDonald's, Norwegian cruise lines. We'll take a look at key consumer stocks

which fell today next on overtime. Welcome back to closing bell overtime live from the NASDAQ market site. Small gains for the markets today, but those are still record closes for the NASDAQ and the S&P 500. Momentum names continuing from memory names such as Micron and Western Digital,

plus the networking names, including coherent and Lumentum, which was added to the NASDAQ 100. But the consumer stocks falling today, TJX, Gap, American Eagle, all getting hit, and makeup not looking too good today. Estee Lauder, Elf, and Ulta, all in the red as well. We'll talk more about the consumer coming up. Well, the markets have been in melt up mode off the recent lows, but the technical picture may be starting to show some cracks under the surface. Let's get a technician's take with us now, Chris Verone, chief of market strategist and partner at Stratigis, a bared company. Chris, great to have you with us. Great to be here. Let's start off with Micron. Yeah. Because that seems like the poster child of what goes on day in, day out on the indices. You know, listen, I think we're about 170% above the 200 day moving average on Micron alone.

S.K. Heinex has doubled over the last 18 trading sessions. You can go stat by stat. It is in that mania manic-type melt-up mode. And it would be foolish to say that we know the hour or the day when that comes to an end. These can take a life of an own, as this certainly has taken a lot. a life of its own here over the last couple months. But I do think you ought to be managing risk or protecting longs or profits here. I don't know what the next month or two will look like here. But I do think you're starting to see a couple fissures starting to emerge around the surface that maybe demands some attention. We've kind of had this meltup call, but I want to be open to what could change. Yeah. So aside from, let's say, Micron, where it's one of those things

where you just assume there's going to be a sharp break at some point, whether that ends the trend or not. But in terms of the rest of the market, there had been some. comfort in the idea that some cyclical parts of the market were working and maybe they've given up a little bit. So what are those cracks she's talking about? You know, I think the funny thing about this business is sometimes you get the reasons wrong, but the call, right? And we kind of entered the year thinking that, you know, a new Fed chair cuts into an already hot economy and you get a meltup. Well, we got the meltup, but without the Fed cutting into an already hot economy. And I think when you look at some things that have been really part of the bull case for three years, we've been unapologetic

bank bulls. There's some crack starting. developing these bank stocks. I mean, Wells Fargo broke down last week, JPMorgan and BAC on the weaker side. I think city's still okay here, but this flattening yield curve seems to be taking its toll or higher two-year yields seem to be taking its toll on banks. You're not seeing it yet in the calendar stocks. Morgan Stanley and Goldman continued to trade well, but, you know, what was already a pretty narrow financial sector, I mean, consumer finance names have been weak. We know insurance has been weak. Probably don't want to lose these bank names or at a minimum kind of put it on the wrong side of the ledger. Something seems to be changing in that group. So all in all, are you on alert

when it comes to the broader entities? I think that's the right way to say. We've been using 7755 as kind of the number. You know, we cross 7,400 today. To say we're in the zone would probably be premature. But we are starting to keep track of, hey, what are some fissures? You mentioned the consumer stocks at the lead-in. I mean, it's bad in consumer world. And that's a, you know, it's an important difference from this time a year ago. When we came off the tariff loads, discretionary lead, at least for three or four months. And you just have not had that response here. Now, maybe take some solace that neither have consumer staples done anything of great significance here, nor has health care. So there's been no overt defensive move. But

there's some fissures starting to form that at least put me on some alert here. Given how the markets have behaved while the straits been closed and the fact that only isolated parts of the market seem to be really taking on water because of what's going on with energy, what do you think happens? Is it a sell the news response if we get a reopening in the deal? Well, it's funny. When you think about how energy behaved, all the outperformance and energy came from, let's say, September until February 27th. It's kind of been a wash ever since, certainly since the straight closed. I do wonder, just markets tend to be counterintuitive. If you reopen the straight here, is that kind of put the relative low in the energy stocks? And, you know, a couple names in

particular, away from just pure energy, focus on things like BHP, Rio Valley, they look great here. And You could say it's geopolitical why they might work, but they're part of the AI trade with the copper build out. Those are some really good looking charts here. So at the opening of the strike could be the bottom for energy stocks, what does it mean for oil? Because fundamentals would point to oil remaining higher for longer. Is that what the charts also point to? Yeah, you know, I won't purposely speak to the fundamentals on crude. I'll leave that to people way smarter than myself.

I think oil's probably more episodic, the energy stocks. I don't believe to be episodic, and we just ask the very simple question. Energy's weight in the S&P is about 3%. Knowing what you know about the world, is that the appropriate weighting. And I think there's still an opportunity to take an opinion that's different than the index opinion on what your exposure to energy here or basic resources as well. Chris, good to see you. Great seeing you guys.

Thanks very much. All right, a big recent theme in the market is forcing a Nintendo to hike the price of its Nintendo Switch 2 console. Details on that are coming up. And check out shares of Beezer Home storing on a more than $700 million takeover offer from DreamFinder's home. That's a roughly 40% premium to Beezer's closing price when the offer was submitted to the company's board nearly a week ago. A merger would create the nation's seventh largest home builder. Closing bell overtime. Be right back.

Welcome back. Nintendo shares down today after the company lowered sales guidance for the Switch 2. Last week, the company announced a price hike for the console due to the soaring price for memory chips, driven, of course, by a AI. When Apple reported results a couple of weeks ago, Tim Cook made similar comments about the price and scarcity of memory, but that has been great news for the companies which make those chips, including Micron, Sandysk, Western Digital, and S.K. Heinex. Question, of course, for those names and those device makers is when we've been asking this whole hour, so how long can it last? I mean, I mean, forever, according to some people. Right. And, you know, it's funny. The bulk case in support of

the continued pricing power for memory chips, it's, oh, it's such a tiny percentage of the overall cost of a data center of these massive AI systems. But there's all these other products where it's not a tiny percentage. Now, I mean, the switch is going from $450 to $500. That's a meaningful interest for a consumer that's already strapped facing higher costs for everything. And then also consider it's not just a switch, it'll be laptops. Yeah. You know, and all these other devices that we actually rely on. I mean, you can probably put off by a Nintendo switch, but, you know, at some point you got a laptop. Phones. You know, all that stuff. Yeah, if you upgrade your phone. No, it is interesting. I mean, it clearly is it memory makers are imposing this tax on the system.

Definitely. And the stock market says, great. You know, we want to buy the tax collector. Until it's not, yeah. Sticking with the consumer here, consumer staple stocks moving lower today, that includes the basic food and products we buy, such as General Mills, Kraft Heinz, Pepsi, and Procter & Gamble, but also the stores where we buy those things, Dollar General, Costco, Walmart, and Target chairs are finishing the day lower by 5%. That's down a third straight day. It's worse three-day stretch in more than a year. weighing on the stock, a Washington Post article questioning whether the new CEO can bring back Target's magic. Also, new note from Barish analysts at Barclays, who reiterated his underweight rating, but he did increase his price target to $118 a share, right where the stock

closed the day. Even with today's decline, Target is still up 20 percent this year. It has been one of those major catch-of-trade disparity in terms of valuation between Walmart and Target was so great that there was a snapback. But Target really focuses on the stuff that we can do without. which is to its definition. The discretionary mix for sure, although definitely exacerbated by a broad move out of these names. I mean, Walmart was down more than 2% today. The equal-eat consumer discretionary, I keep pointing to, it was down a couple percent. It's 12% below its high from February. So clearly, there's a lot of doubt about both the durability of, you know, consumer spending, but also it felt like capitulation by investors to a degree as well.

The Goldman Sachs trading desk saying there was a lot of just sort of selling in non-AI stuff just to participate, at least in some of those other names. So maybe that did hit, you know, these names. And it was across the board. I mean, you saw travel stocks trade lower as well. You saw Nike and on-on, which reports tomorrow, by the way. Exactly. So I can see that, yeah.

Yeah, see about whether in fact it's a contrarian signal. Is the Trump administration on a campaign to censor Disney? That's what one FCC commissioner is telling the company's CEO. Details on that are straight ahead. Plus, Wendy shares getting cooked today. J.P. Morgan downgrading the stock to underweight from neutral. citing struggling sales trends in the U.S. at capital allocation concerns

and aggressive competition from McDonald's and Burger King. Closingville overtime. Live in the NASDAQ market site, we'll be right back. Interesting trading in shares in Moderna today. The stock jumped at the open, hitting a high about $59,

but it slid throughout the day to close below 53. Moderna is in the early stages of developing a treatment for the Haunted virus, but health officials are downplaying the threat, saying the risk to the general public is very low. Moderna is up 77% this year, but still way off the pandemic era highs.

It almost feels like it should have never traded that high given the company. I mean, the company was so like we're exploring. It's still very early stages. It seemed to really catch fire at that moment when everybody was also having a little bit of flashbacks to 2021 and 2022. And not just COVID, but also just a lot of the speculative stocks that work then. 16% of the share of float was short in Moderna. So it felt like kind of an excuse for a squeeze, and then it just doesn't seem as if the news is going to support that kind of a move in terms of this virus.

Well, check out shares of Disney. One of the biggest losers in the Dow today, the stock has made a bit of a comeback recently, but still down roughly 7% on the year. This, of course, comes as Disney goes through a CEO change. Josh Tomorrow took over from Bob Iger less than two months ago, down 3% today, reasonably well-received earnings results in Josh. tomorrow's first quarter. They have their earnings level, net income is kind of back to pre-pandemic highs. Seems like they have decent scale in Disney Plus, but nobody's quite sure about the next push. Plus, of course, consumer-exposed business and theme parks probably weighing on investors' minds. Yeah, I mean, we mentioned the travel socks is a down day across the board, so no surprise Disney is caught up with that.

Well, sticking with Disney, one FCC commissioner is accusing the White House of launching a censorship campaign against the company. Julia Borson's got the details there. Julia, Melissa, that's right. The only Democrat FCC Commissioner Anna Gomez sent a letter to Disney CEO Josh tomorrow saying she believes the commission under Chairman Brendan Carr has been weaponized. Gomez calling the FCC's actions against ABC a, quote, coordinated campaign of censorship and control carried out through the weaponization of the FCC's authority as a federal regulator and aimed at pressuring a free and independent press and all media into submission. Now, what Commissioner Gomez is referring to is a number number of things. First last month, the FCC ordered eight ABC-owned TV stations to file a license

renewal request years early. That after President Trump called for ABC to fire Jimmy Kimmel after he made a joke about the First Lady. And the FCC is investigating whether the view qualifies for an exemption to the agency's equal time political rule. Now, Disney confirmed receipt of the letter from Commissioner Gomez but had no comment beyond pointing to its petition to the FCC last week in which ABC opposed the FCC's order and accused the commission of violating the network's First Amendment rights. Guys, is there any shot, Julia, that they would actually revoke the licenses? Well, I think that they're making them jump through a number of hoops. I think it would be incredibly unusual if they actually did revoke the licenses. So we're in uncharted territory here.

And then I guess, Julia, this communication between the Democratic FCC commissioner, and the company, is the thought there that that would give the company a little bit more of a basis in its legal fight against the FCC if it came to that? I mean, it looks like she's trying to show them a vote of support. There's so much about the situation that's unusual. It is incredibly unusual for a commissioner to directly contact the CEO of a company that would be under her jurisdiction, if you will, and then to post that letter on X, which Commissioner Gomez did as well. So all of this is unusual, but she does seem to be showing Disney, Josh Tomorrow, as well as ABC, that on the heels of them responding to the FCC as they did last week, that she is supporting them. You know, Julia, you know, sort of a separate issue, but also shows the FCC's willingness to weigh in on matters when it comes to these media companies. I think Brendan Carr has been out there saying they want to look at how many sports events are now on pay TV and on different stream. and there's confusion among consumers, and that's something that also would obviously relate to ESPN, perhaps.

Yeah, certainly that would relate to ESPN, and this very much falls into the category of what's happening in New York this week, which is the upfront ad sales season. We're seeing all of the media networks starting with NBC. Today you have Fox this afternoon showcase what content they have, and they're putting their sports deals front and center. There's been some reporting that Fox has put pressure on the president and maybe on the FCC to make sure that there are a certain number of NFL games that continue

to be on linear television as we see increasing interest from the likes of Netflix as well as YouTube to get those streaming sports rights. So the FCC is really at the center of a lot of these political and cultural issues right now. Julia, thanks, Julia, thanks, Julie Borsson. Let's get you set up with tomorrow's trade today and a key reading on inflation economists are expecting the April consumer price index to rise 3.8% year-on-year-on-year, excluding food and energy prices. The core CPI has seen increasing by 2.7% from a year ago. And on the earnings front, we will get results from Under Armour, On Holdings, Eramark, E. Toro, and 10-cent music before the trading day begins. We're seeing a real tail off there, but a couple of consumer reads there.

For sure. And, you know, the reactions in the market to earnings of general have been pretty spring-loaded this season. And then the CPI, you know, for as much as it's not been so much a macro-driven market. Yields were up today, and we're a little bit on guard what it means longer term for the inflation and Fed picture as we wait for Kevin Warsh to get a vote in Congress. That does it for overtime today. Fast money begins right after this quick break.