Closing Bell - Closing Bell Overtime: Time to Buy? 4/13/22

Episode Date: April 13, 2022

Stocks closed near session highs. Chris Hyzy from Merrill and Bank of America Private Bank says there are bargains in the equity market. Plus, Tom Lee from Fundstrat Global Advisors explains why stay-at-home stocks is the “toughest group” to own right now. And, Michael Santoli looks “Beyond the Banks” for his Last Word.

And welcome to Overtime. I'm Scott Wadley. You just heard the bells. We, of course, right here are just getting started. In just a few minutes, I'll be joined by Fundstrat's Tom Lee, who just released a late afternoon note that you need to know about, and I'll tell you about it. Halftime's Josh Brown will also be here. We do begin, though, with our talk of the tape. This rally, even as another read on inflation, burns red hot. So given the move today, does it mean that it's OK to buy stocks again, as some are now suggesting? Let's ask Chris Heise. So given the move today, does it mean that it's OK to buy stocks again, as some are now suggesting? Let's ask Chris Heise. He's the chief investment officer for Merrill and Bank of America Private Bank. It's good to see you right here at Post 9.

Is this a peak inflation rally? Is that what we witnessed today? I don't think it's a peak inflation rally. There's so many different gauges to still see for the rest of the year. It's going to be hard to peak out inflation until later in the year. But we all know that equities get ahead of that. We all know it's a discounting mechanism. Is it some money coming back into the equity markets and selling pressure being released? Yes. Particularly as it relates to sentiment became so poor. Sentiment was jumping ahead of everything. And you're seeing it in the sector, different performances, and you're seeing

it in individual equities. Those that can't execute, forget about it. I mean, there are others who have a different view, though, right? I mean, Gundlach is talking about peak inflation, Minard here yesterday, Governor Waller with Sarah in the last hour. I want you to listen to what he said, and we can react on the other side. We might be at the peak and that we'll start seeing some relief on this in the next coming months. But it doesn't relieve us of our job to, you know, remove accommodation and get inflation down. Thinks they can pull off a soft landing, too. You don't buy that? When have we off a soft landing too. You don't buy that? When have we seen a soft landing?

I mean, we really haven't seen one in other cycles before that's been bumpy landing. So I would expect a bumpy landing. And in terms of inflation peaking, there are going to be some base effects that roll off. But the key measure to really watch as it relates to asset allocation and liquidity in general is money growth.

And money growth is still running at least least in double digit percentage terms. I mean, there are some who suggest, I mean, OK, the Fed's going to be aggressive. Right. We know that. Waller said it himself with Sarah just a little while ago. He favors this whole front loading deal. You had Bullard today, quote, to the to the FT. it's fantasy to think modest rate rises will tame inflation. The other side of that, people like Minard, who was here yesterday, it almost feels like some are now saying, forget about don't fight the Fed, don't fear the Fed, that stocks still have a runway. I want you to listen to what Minard said about that, and then we can talk.

Every time I hear another Fed member talking extremely hawkish about action, whether that be rate cuts or shrinking the balance sheet, the more bullish I get. And the reason for that is, when you start to look at rates, when the Fed starts to raise rates and the curve inverts, we see the long end, typically 10-year note yields fall by, you know, between a half and three quarters of a percent. If we have long rates fall, that's going to make a lot of stocks look a lot more attractive. Buy that? I do. Very much so.

As a matter of fact, if you really think about what Scott was saying, at least I think, is we're trying to get ahead of not only the negative aspect of negative real rates, we're trying to fast track that to a positive real rate and actually almost force the hand of the curve. And if you force the hand of the curve, you could actually see more money come into the equity markets, even though a lot of people are starting to think that fixed income is becoming attractive again. I know what I hear from more and more people in the last couple of days. Right. There is no alternative to stocks seems to be slowly changing.

See, that's a great point, because the essence of investing in this kind of a cycle is to have your highest level of diversification possible. It's not to run away from the asset classes just because all of a sudden maybe 60-40 is not going to work anymore. That's not really the way to think about it. The whole point is, though, even if you think we're going to have a recession, and by the way, Scott Miner thinks we're going to have a recession, but we're not having it tomorrow and we're not having it next month. And it may be a year and a half to two years. And that gives you the runway to think that equities can go up. Doesn't that make sense? It does make sense. And it could be six months.

It could be 24 months if you take a look at past cycles. But at the same time, the way the markets are working, they're starting to discount who's coming out on the other side potentially better and who can execute. And that's why there's bargains. There's literally bargains in the equity market right now. Where? Well, in particular, I would say still the real asset equation.

I mean, there's some air pockets there, right? When you take a look at energy and materials, there's an air pocket in a lot of those prices because all you would need to see is some level of supply increase, some level of hopefully order being restored in Ukraine, and you get an air pocket. And everyone might say, oh, see, that particular trade is almost over. It's not. Free cash flow is building, building aggressively there. And even if multiples come down a lot, free cash flow is rising aggressively.

So those are the areas of look. Still energy materials. And then on the flip side of it, if you're on guard and you want to play a little bit more defense, you have the barbell with health care. I mean, your point is well taken. By the way, not talked about much today. Nat gas. Do you see that? Seven bucks, seven dollar nat gas. Yeah. And it's to your point, like energy still has a bid under it because of that. Yes. And we all know when we look back in the last two to three

years, even before the crisis in Ukraine, very little capex was spent in that area. And you can't turn that on that aggressively very quickly. What about the idea of turning away from some of the more defensive areas of the market? And if you do think that there's runway in front of us, get a little more growthy. Buy the cyclicals. Don't be afraid. I think at the end of the day, it's going to come down to what part of the growth spectrum are you looking at? Is it a free cash flow producer?

Or is it something that's gonna, like we've long talked about, Scott, those long duration, you know, what we call big story, little profit areas. Those are areas, unfortunately, where the momentum is gone and it's gonna be very hard to attract that investor back into that area. You're talking about like the ARK kind of stocks, right?

Cathie Wood, who was on yesterday, defending the kinds of stocks that she likes Kathy Wood, who was on yesterday defending the kinds of stocks that she likes to buy and, by the way, continues to buy. You don't think investors should buy that game? You have to adjust your time horizon. I know that sounds almost like a caveat to say it's OK as long as you wait. But that's what those kind of companies are built for. They're built for the venture capital areas within the public space. All right. Let's welcome in Halftime's Josh Brown to the conversation. Also, of course, Ritholtz Wealth co-founder and CEO. You've heard the

conversation, Josh. We had a really nice day today. And I wonder whether you think this was a peak inflation rally. I could have listened to more Keith, one of my favorites. I think he's spot on. Or Chris, either one. I like Keith too, but I like Chris even more. Chris, you did a great job. And I think the thing that you said that was really important was that we could have an overall bounce in stocks that does not include the growth and low profit area. And if you look historically, it's actually very rare

that whatever the leadership group was of a bull market that's been extinguished, it's very rare that that leadership group comes back into vogue. In fact, it's usually the opposite. Investors discover new stories. They fall out of love. They make margin calls or miss them. And those names tend to diminish in popularity for years and sometimes forever. And we've seen that with high tech in the past. We've seen that with resources, emerging markets. So I think that I think you're going to nail it with that call. And I think the point for viewers that Chris made is that you can always find smart things to do. Like that's that's really what people should be thinking now. So I saw a stat this morning.

The minute I heard it, I said, that sounds toppy as hell. I heard and we looked the 10 year treasury yield broke above its 200 month moving average for the first time since 1987. So this is a development 40 years in the making. And as soon as I heard it, I said, all right, that's that sounds too much. So I'm not here to call a peak in inflation. I wouldn't be the person to do that. But that sounds a little bit out of control. I think you're going to see that subside. I think that unlocks a portion of the market that becomes more viable because maybe expectations have finally caught up with reality. And whether or not we peak in overall headline inflation, in the components that matter,

we've already not only peaked, but are rolling over. And that's a process that I think will happen segment by segment. Yesterday, we talked about, I dare you to try to plan a trip. Look at the travel names today. Look at what the guy from Delta said. Over the last five weeks, we've experienced the highest level of sales and booking activity at any time in our history. Yeah. You know why? Because if you had an eight year old in 2020 that got a canceled trip to Disney, you're still doing it when they're 10. That's what's going on now. Ain't going to last forever. It's definitely a catch up, but so what? Feels good if you're in those names. So I think there are smart things that you can be doing. You don't have to have an inflation call or a recession call or even an S&P

call. You just have to say, I'm an investor. Some of these things have been overdone. In my view, yields, inflation chasing, hysteria. That's one of those things. Hey, Josh, it's Chris. Just confirming that point, or at least getting a little bit more from you on that. Some of the questions that I get almost daily, at least weekly now, is portfolio construction, asset allocation. Did the principles of that change just because we're going in a new paradigm? Or are you just simply rotating underneath those areas to look for, like you said, those areas that are going to come through this other side of the cycle

in very good condition? Has that changed? You know, we get that it's not a day that goes by that we don't answer some version of that question. That's our job. We're happy to do it. And without being overly sardonic, the answer is usually some version of let me know when we're not going into a new paradigm. There will always be variables that you say to yourself, wait a minute, I don't understand. The Fed is in a rush to tighten into an economic deceleration just so that they can cut again at some point in 24. That's what we're doing. So it's all always going to feel like a new paradigm. But to more directly answer your question, I think a lot of this is going to be timeframe dependent. And one of the things that we try to do on Halftime yesterday,

we just talk about like, what bucket of money are we allocating? When is its use? Because that's going to determine what sector, what theme, what valuation versus what technical trend. And so if we're talking about a scenario where an investor is not necessarily worried about fluctuation, is more worried about, I need my purchasing power. That's like 90% of the investors you and I probably speak to. A hundred percent. You have to be out there looking for opportunities. There is no option. I'm not going to play because it's too many too many variables. I don't understand. That option is not available to us. I think it's interesting talking about being time frame dependent. That's why I think you can still, you know, look out and have an opinion on inflation

or recession and think about when it may hit, though, Josh, like Scott Minard suggested yesterday. Yeah, I think we're going to have one. I don't think the Fed can engineer a soft landing because they've never done it. That doesn't mean that you can't be bullish on stocks because the runway until you get to that worry point is still far into the future. So there are stocks that you can buy and there are a lot of them and maybe in some of the areas that people want to throw in the garbage right now. I bought the other day on the show, I talked about IEO, which is crude and natural gas producers. I tried to buy it on a down day. There haven't been many of those. For me, that feels like an area that has runway regardless of the recession call or the inflation call. And tellingly, we saw crude oil come down 25% in the wake of the president reopening the Strategic Petroleum Reserve,

which, by the way, nobody has any real transparency into, but fine. Crude oil got hammered. These stocks didn't budge. Like, that's what you're looking for as an investor, I think. The other one I mentioned is ITA. This is Aerospace and Defense. It's irrelevant, the state of the economy.

Europe is awake now. The whole world is awake now. We can no longer afford to rely on treaties that were signed 70 years ago. The contracts are coming into these companies, and that will be uninterrupted regardless of what Jay Powell chooses to do at the next three meetings, 50 basis points, whatever. So try to think that way. What's inevitable? What's inevitable? Some things are inevitable. Speaking of sort of the Fed, you know, shocking the market, which some have suggested like Dudley that you need to do. It's the only way to get it under control. I thought, you know, the other real standout from Waller was Sarah was he doesn't favor that.

Not this central banker. He pushed back on. I mean, that's got to ease some comfort, too, that they're not going to go, for lack of a better word, crazy. Well, they've been told now for the better part of a year they've been behind the curve, right? So a lot of the verbal communication now is to try to get at least the communication ahead of the curve and then ultimately see what happens with data reactivity. But at the end of the day, the Federal Reserve's job is price stability. And they understand the power of wealth creation. They understand that. So it's really hard

to consider the fact that they're targeting certain parts of the wealth spectrum. My opinion, this benefits the investor who thinks at least three, five years down the road and thinks about what the equity markets can give you. I'm going to ask you and I'm going to ask Josh, too, after you answer this question, and then we're going to wrap it up. I mean, do you feel like this has some legs? Can we put a few days minimum together here and feel better about where we are? We don't have to be so fearful about interest rates getting away from us, the Fed being too aggressive. Can we can we do that?

I think everybody's had the macro strategist hat on for quite a long period of time and the Fed hat and the geopolitical strategist hat. Going back to what we're in the throes of right now is earnings season. If guidance is decent, which we expect, and profits come through with a little bit of a surprise, which we expect, we think it has legs. Okay. Josh, give me 30 seconds. Wrap it up for me. Big thing to watch for me, the semis are coming off of a higher low. That's really important. You need to see transports. You need to see semis and home builders, most importantly.

They don't have to break out. They don't have to even work. They have to stop going down. Higher low after a prolonged decline is your signal. Keep a close eye on those charts that haven't been able to find a bid where there are quality stocks. I think that's going to be very meaningful if we can put together two days, two weeks, something more meaningful. All right. Good stuff. Thank you, guys. Josh Brown, Chris Isey, appreciate it very much. Let's get to our Twitter question of the day. Now, we want to know which sector is going to perform the best this earnings season. Is it going to be tech, defensive stocks like Staples? What about cyclicals, industrials or other? Head to at CNBC Overtime. Please cast your vote. We'll

bring you the results at the end of our program. Up next, we have a late-day alert from Fundstrat's Tom Lee. He just put out a new note, a flash for the markets. You need to hear it. You will hear it from him next. And later, the bull case for banks, two key names to bet on as earnings roll on. Got more reports coming out hours from now. Overtime's back in two minutes.

All right, welcome back to Closing Bell Overtime. Our next guest has remained bullish through most of the market turmoil and just released a late day note reflecting that. Tom Lee is Fundstrat's head of research. He came down to Post 9 as well. It's good to see you back here. Great to see you, Scott. I mentioned this flash, what you called it, that you put out. You're impressed by the strength in stocks, even on a day where we got a blistering hot ppi that's right we've had a lot of bad pp cpi prints you know yesterday cpi today ppi and not only do our stocks holding up but the bond market's actually been taking this really well the curve steepened so yeah i think whenever you see something like that it does sort of catch my attention i mean the point to you is that you feel like almost all of the bad news is now firmly baked into this cake.

Yes, I think in a way the market's not being surprised by bad inflation data any longer. And there are maybe hints that inflation could be peaking. And I heard Scott Minard and even Jeff Gondlach mentioned the same thing. And I think it's encouraging for markets. A couple of bond kings making their call is, you know, no slouches, right? Talking about the bond market and inflation, right? You want to listen to what they have to say. Not that they're always right.

Correct. You still need to pay attention. That's right. Because, you know, at the end of the day, the stock market listens to the bond market. And the bond market was screaming hawkishness for a long time. And now I think the bond market is sort of satisfied where the levels are. And now inflation data isn't ruffling the bond market. Should I now really be convinced that it's OK to buy stocks? I think in the interim, a lot of bad news. You paused there a little bit, right? You're afraid to maybe, you know, go full bore here.

You're not like a raging bull, but you're certainly more positive than negative, it sounds like to me. That's right. And relative to consensus where everyone's gotten bearish, we seem quite bullish. I do think there's still greater than a 90 percent chance February 24th was the market low. Doesn't mean we go straight up from here. But the reason I think stocks can be viable is that there's a chance the Fed could make a potentially dovish pivot. Because as one of the things we pointed out in our flash is that the market's expectations for hikes has dropped from nine to eight this year in just a matter of two days. I hear you. But right. I mean, Waller was just on. Right. He's talking about front loading rate hikes. Right. Fifty at the

next meeting. More following that. You got Bullard out. Now, their word isn't in stone, obviously, but nobody who has spoken on behalf of the Fed, including the most dovish person on the Fed, arguably, Brainerd, suggests that there's any sort of pivot in the offing. I wonder if that's like false hope. Yeah, it could be false hope. But nothing's cast in stone, as you said. So today, all the data today supports the Fed being really tough and aggressive in the near term, May and June. A few months ago, that would have rattled markets.

Now the stock market's taking it in stride. So I think if we're talking about front-loading some hikes, but then as we get to September, things could take a dovish pivot because inflation's cooling, that would be positive for risk assets. Everybody's trying to come up with the next and greatest acronym. You have BEEF, B-E-E-F, Bitcoin plus Bitcoin equities, energy and the FANGs. That's your best strategy right now for investors watching? Yes. Yes, that is. Tell me why. Well, you know, FANG, we think, let's start with the bottom FANG. I think in the next six Well, you know, FANG, we think, let's start with the bottom. FANG, I think in the next six months, you know, they got obliterated, been in a bear market now for

more than a year, reasonably priced, GDP grower, inflation protected, energy we've liked for a long time. It's still our top sector pick. And then we like Bitcoin and Bitcoin equities because if the environment shifts to risk on, crypto follows. And, you know, we have to keep in mind, April 18th is tax day and crypto has about $500 billion of capital gains taxes. So on a T plus two basis, people have to be selling their crypto and their stocks by today in order to pay their taxes by Monday. But don't you need, you need a really risk on market to go Bitcoin right now don't you i mean it's so highly correlated to it uh yeah or or you could get regulatory clarity and and there are chances for that because as you know the federal reserve's trying to get some feedback on their white paper on central bank digital coin uh we might get some clarity on our bitcoin ETF. We know corporations are using Bitcoin.

So I think the usefulness of Bitcoin is rising. And if you have more users and more reasons to use it, that's why Bitcoin could go up. So risk goes back on. People put money into crypto like Bitcoin. And then we go back to the Qs and we just go right back to the growth trade? That's right. That's what I think is sort of what makes us second half strong. And of course, NASDAQ is a huge component of the S&P, and that's what keeps

us from hitting the February 24th lows. What if inflation hasn't peaked? What if everybody's getting a little too giddy? I think we have episodic inflation. So I think it's correct. We're still going to see worse wage inflation and shelter inflation. But what people have to keep in mind is that goods inflation was a huge contributor last year. Used cars alone was 1.5%. New cars was 0.4%. That's two percentage points of the 4% was just cars. And that's now potentially going to be a negative CPI effect in the second half of this year. Quickly, the one sector that you absolutely would stay away from is what? More than any other right now? Well, I think the toughest group right now to own

is the stay-at-home stocks. And that's because they're so widely owned now. And I think Bitcoin equities is going to be a better way for people to play sort of secular growth and hyper growth if they're coming back into the triple Qs. Like a Coinbase rather than Zoom. I'm just throwing those names out, so it's kind of obvious what we're talking about. That's exactly right. Silvergate, Coinbase, Core Scientific, the miners. These kind of stocks, I think, are going to be multi-decade stories where stay at home was about COVID, and that's harder to make a secular growth case now. It's good to see you, as always, especially here in person at Post 9. That's Tom Lee of Fundstrat.

Up next, we have exclusive data on how many Americans think now is a good time to invest in stocks. You're going to be surprised by the shocking new numbers next. And later, betting big on the consumer. One portfolio manager putting her money in retail despite inflation worries. We're going to break it down in our two-minute drill. Overtime is back next. All right, welcome back to Overtime. It's time for a CNBC News update with Shepard Smith.

Hi, Shep. Hey, Scott. From the news on CNBC, here's what's happening. Cops arrested the alleged New York City subway shooter this afternoon. 62-year-old Frank James now facing a federal charge of committing a terrorist act on public transportation. Cops say somebody spotted him at a McDonald's, called a police tips line, and minutes later they picked him up in the East Village neighborhood of Manhattan. Just yesterday, police say 33 shots fired inside a subway car in the Sunset Park neighborhood of Brooklyn.

Ten people struck, 13 others injured. Cops say all will survive. A smoke bomb set off before strap hangers went running for the exits. Police say the shooter left lots of evidence behind. A Glock handgun, a hatchet, a credit card, his own, more smoke canisters, and the key to a U-Haul van that police say he rented. The suspect nabbed just 30 hours later. If convicted, he faces up to life in prison. Tonight, what we've learned from his online videos and what police are saying about his motivation on the news.

Right after Jim Cramer, 7 Eastern, CNBC. Scott, back to you. All right, Shep, I appreciate that. Thank you. We'll be there. A stunner today in CNBC's All-America survey. Just 28% of you think now is a good time to invest in stocks. It's a stunner because it's the lowest number we've ever seen in the 15 years we've been doing that survey.

Our Steve Leisman is here with more, and it is a surprise. It's really quite amazing, Scott. Americans couldn't be or at least have not ever been as downbeat about stocks as they are in this survey. And it goes along with a very sour mood on the economy. Take a look. Come over here with the camera. This is where we are now. 28 percent saying it's a good time to invest. 48 percent saying it's a bad time. And I'm going to walk through time here. I'm going to do a time walking. You have to go all the way back. I can't believe how long we've been doing this survey to 2011, which is the wake of the financial crisis, in order to find a time when the public was more depressed about this and more protected from a higher percentage of those saying it's a

bad time to invest. Ask what the best investment is right now. Check this out. Real estate takes the prize at 39%, up 10 points from when we last asked the question in 2020, followed up by gold, eight points higher at 24%. Stocks now dropping to third, but check this out. Crypto and stocks, 16%, 14%. That's within the margin of error of the survey. Interestingly, demographics tell us your crypto investor is not your gold investor. Crypto investors, you can see here, they're young, they're urban, and they're optimistic about the outlook. Your gold investor, older, rural, feels they're falling behind economically and financially. So at the moment, crypto appears to the public to be less of a safe haven asset, more of a risk asset.

Although, of course, Scott, as you know, the reality depends on what day you're looking at it. But that's the public perception, Scott. Yeah, well, some people think that crypto is the new gold. Steve, thank you. I know you're going to stick around. Let's also bring in SoFi's Liz Young to react to all this. Are you surprised, I guess, as much as we were by the findings? It's the lowest percentage, as we said, since we started doing this 15 years ago.

You know, I'm surprised that it's the lowest percentage we've seen, but I'm not surprised that people aren't feeling particularly optimistic about stocks. We keep talking about a recession coming. We keep lining up all of these things that are in our face. What I am actually a little bit surprised about is that there's so many people that are still wanting to invest in real estate at a point where housing affordability is going down. And we've got rates rising and home prices are at all time highs. So that is probably the most surprising aspect for the whole survey for me. I mean, you know, the next question is going to be because if there's so much negativity, whether that in and of itself is a contrarian indicator like, you know, Scott Minard and others have suggested, what do you think about that? Yeah, I mean, if you look over history, usually it is a contrarian indicator.

What I would say to people, and I know you've talked about this a lot on the show already, and it doesn't make good TV to just agree with everybody else, but I do agree. 60-40 is not dead forever, and bonds are looking attractive here. We have a two-year yield that's still pricing in eight hikes this year. I don't think they get there. I don't think they have to get there, which would be a rally for stocks, and it would steepen the curve. So if you see the two-year rally a little bit and you see whether it's a dovish pivot or just that the 10-year hits a cap, that is going to be good for stocks. Now, it's different what you want to buy in this environment and how you want to be positioned. I do still think we have a lot ahead of us. We've got midterms. That's usually not good for the market. So you do want to have defensives

in the portfolio, things like consumer staples, utilities, dividend the market. So you do want to have defensives in the portfolio, things like consumer staples, utilities, dividend payers. But you also want to look at things like health care, which I won't call them recession proof, but health care is a sector that's not as sensitive to rates. It is thought of as a defensive sector, but it can still produce growth in biotech and pharma. So I would look at that as a good opportunity, too. Steve, you sort of alluded to this at the end, but before you made your way over to the camera, I mean, these really are just moment in time surveys and things can change pretty quickly. In other words, put a few days, put a few weeks of positive markets together, then go back and do the survey. And then you tell me what the results would be.

You're 100 percent right, Scott. We do capture a moment in time. I think this has probably been gathering. People have seen some losses. They've seen the volatility. I also think, as I said at the very beginning of my report there, Scott, that the overall sour economic mood, which is very much colored by inflation, affects these views on the stock market, that people have this connection, the economy and the stock market are kind of the same thing, and they don't think, you know, critically or analytically the way Liz is kind of telling you that, hey, there are certain places where you can still make money despite what may happen to the economy. We could come back later and it's it's it's it would be a better one.

But though, by the way, I will say sometimes that that those attitudes of Americans have done a pretty good job presaging where the market's going. And sometimes they just follow where it's been. I try and read the tone, Steve, and the way that people say things and the way that you delivered the crypto news sounds to me like maybe you were most surprised by that outcome and how close it was to stocks. I was very surprised by that, for sure. I thought we were kind of waste. I have to be careful because I only have a certain amount of questions on this survey because it's a real telephone survey. It's a very expensive survey, if you will, to call and not do it online these days. We do it the old fashioned way, so to speak.

So I was thinking, you know, maybe I'm going to get two or three or four. Maybe I thought eight percent of the public would think that crypto was a good thing to invest in. 14%. And I don't know if it's going to stick around. But one thing we did, Scott, we sort of very early on in 2008 or 9, we started seeing this online shopping thing show up. Now, of course, and it entered just like that. It's kind of sneakily at 14%. Now, of course, online shopping is the biggest one. So there it is coming in at 14 percent. I was also really surprised, Scott, because I thought crypto was a place that people would think more of as a gold replacement. I'm not sure that's true when I look at the demographics. So I love doing this stuff. It seems things I didn't know before about what the public thinks about these things. And I can't help but notice, Liz, I'll give you

the last word, right? Treasury's pulling up the rear right at a time. Then some are suggesting that bonds are finally a good investment, perhaps even better than stocks. Yeah, and I think that that's indicative of a contrarian signal. I do think that bonds are oversold here. I'll go back to the crypto and gold conversation, though, too. Also, I want to know what happens to people between the ages of 34 and 65, because there was a big gap. I'll get you that data, Liz. I'll get you that data. But you tell me, Liz, Liz, I want to know what you think. Would you say it's more of a gold safe haven or more of a risk asset for the future? Where do you put it? I think gold is actually an OK investment here, which is surprising for me to even hear myself say. I'm not usually a gold bull.

I think crypto this year, the behavior of it has been a risk asset. And that's what started to confuse people, which is why I think you got that result that gold is the thing that's more attractive. What a great conversation. Guys, I've got to leave it there. Steve, thank you so much. Liz, our thanks to you as well. That's SoFi's Liz Young joining us. Coming up, it's Santoli's last word, why he's looking beyond the big banks this

season who are reporting. But first, let's get to Christina Partsenevalos, who's tracking some big action in the OT. Hi, Christina. Well, we've got weapons, lockdowns, nuclear power and an investigation into secret tech provided to the Chinese. Sounds like the making of a spy movie. I'll have the details on which companies I'm talking about coming up right after this break. Let's get a check on some movers in the OT. Christina Parts of Novelos is tracking the action from the Nasdaq. Christina. Thank you. So we're going to be keeping an eye right now on shares of Apple in the OT. A new report shows that MacBook shipments will now be delayed until

June. Key bank analysts saying today it would be hard to make the quarter with China's massive COVID lockdown. And to the defense sector, President Biden announced this afternoon the United States will authorize an additional $800 million in weapons and ammunition to Ukraine. Today, the Pentagon also hosted a defense giant leaders meeting with Lockheed Martin as well as Raytheon. So we're also expecting a readout of that meeting later this evening. And then we also have shares of semiconductor software company Synopsys that reversed earlier gains today. This after a report this afternoon that claims the company is under investigation for passing key technology information to Chinese companies Huawei and Semiconductor Manufacturing International Corporation. And lastly, I just wanted to flag one more.

This is Uranium Energy Corporation as the stock soared well beyond 13% today. No company-specific news, but uranium companies are booming thanks to a global nuclear revival. Scott, there you have it. I appreciate it, Christina. Thank you, Christina Partsenevelis. Up next, banks taking center stage as earnings roll in and they continue to do so tomorrow. So where is their opportunity in the financials right now? Do you play the names that are reporting in the morning? We'll debate it, get you ahead of the numbers next in halftime overtime. And speaking of earnings, don't forget to vote in today's Twitter poll. We're asking you which

sector will be the best performer this earnings season, tech, staples, industrials or something else. You can head to at CNBC overtime to weigh in. And as we head out, a message from CNBC contributor Karen Feinerman as we celebrate Financial Literacy Month. Financial literacy is so important to the overall U.S. economy and development because we're all players in that economy. And if we don't even speak the language, then how can we help develop that economy and develop ourselves and our own role in it? In today's halftime overtime, about 14 hours from now, Citi, Morgan Stanley and Goldman Sachs all report earnings. The reports come at a time when bank stocks have been major disappointments, including today's lead off JP Morgan, which hit a new 52 week low. Even so, Loop Capital's Courtney Gibson making the case today there is still opportunity in the financials. I do believe that there is an opportunity in the financial sector

overall. I do also believe that there is safety in the numbers. So those bigger banks are going to do well. Those banks with a diversified business mix are going to do well because they can make money, even though we're seeing some challenges in some areas of those banks. Well, Serity Partners, Jim Labenthal owns Goldman Sachs and Citi and joins us now. It's good to see you, Jimmy. How are you feeling ahead of the numbers tomorrow? I mean, both of these stocks have not done well. In fact, of the banks, they've been two of the worst performers.

Citi down 29% over six months and Goldman Sachs down 17% over the last six months. How do you feel going in? Yeah, well, good description. And by the way, good description of bank earnings in general, not just J.P. Morgan today, but over the last several quarters. The truth is, when I look at these earnings reports, I'm not looking for blowout, because that's not what moves these stocks. What moves these stocks are the macroeconomic metrics,

things like, is loan demand growing in response to economic activity? Is the yield curve steepening? Is credit quality picking up? Which, frankly, with employment where it is and corporate balance sheets where they are, I feel pretty good about. So I feel pretty good about the macro for the banks. But specific to these stocks, and you pointed out, rightfully so, they've done terribly. Here's the thing that I look at. Their cash flows are sufficient that they buy back

shares in size. And if you look over the last five years, Scott, Citigroup has shrunk its shares outstanding by 25%. Goldman Sachs a little less, by about 16%. At Citigroup, they're buying back shares below tangible book value. At Goldman, they're buying back shares at book value. So in both cases, I feel good about the cash flows being there to support shareholder yield. And eventually, the share price will follow. But you're right. It's been disappointing. Well, I mean, I wonder what the commentary is going to be from the CEOs.

I mean, there are some who are suggesting today that the earnings of J.P. Morgan weren't as negative as the commentary from the CEO, Jamie Dimon. Very accurate statement that you just made. Absolutely accurate. And you know what? I'm going to applaud Jamie Dimon, even as I say that in the last two downturns, one, the early stages of the pandemic and to the fourth quarter of 2018. In both of those instances, his commentary was very negative both times, okay? And it turned out in both times to be too negative, no question about it. However, I applaud him for that. He's being prudent, and I think the CEOs of all these banks need to be prudent in expressing caution about the unknowns ahead. However, underneath that, I do expect the positive economic activity that you and I have been talking

about for some time, I do expect it to shine through over the coming weeks and months. Seems investors are probably most dour, if you will, about Citi. Are you worried about what Citi reports tomorrow and what the stock reaction might be? Yeah, I'd be a fool if I said I weren't worried about it. But where does that worry really come from? It comes from the share price action, which, as I said, with regards to cash flows and buying back shares, perversely can be a positive. She's going to you know, the CEO is going to be buying back more shares at a very low price. But I think really what's going on with Citigroup is that the honeymoon is just about over with the new CEO.

She's done a lot of things to clean up the balance sheet, get rid of international operations, and now it's time for the earnings to show through. Right now she needs to start showing it. All right. We're going to see you in the morning. Jimmy, thank you. Talk to you on the other side of that. That's Jim Labenthal. Good to talk to you. Joining us next. Up next, it's Mike Santoli's last word. Looking beyond the banks, he'll tell us what's on his radar this earnings season. Don't want to miss that. And coming up

on Fast Money, could today's rally spell trouble for the market in the long run? That's coming up at the top of the hour. Don't go anywhere. Overtime is back in two. He's here, Mike Santoli, for his last word. Today is? Well, we're going to get a ton of bank stuff tomorrow morning. It's obviously going to consume a lot of oxygen, rightly so, but there are other things to keep in mind. While we sleep, most likely, Taiwan Semi is going to report earnings. Middle of the night, obviously, semiconductors trading at like 13-month lows or just off the lows today. Hard to see a sustained recovery in this market really rally back anywhere near the highs if they're not participating. So keep an eye on that.

Seasonally, now put this in the For What It's Worth column. The Thursday before the Good Friday long weekend, one of the stronger single days in market lore, market history, up about 80 percent of the time in the last couple of decades. Also, the week after the tax deadline has sometimes also had a little bit of a lift. So you never know. That's no guarantee. But it seems like maybe the market today, in fact, was anticipating some of that. The importance of putting a few positive days together is what? Well, it's significant.

Does it mean anything now? We had a 1.2 percent, you know, one day gain two weeks ago today and it didn't lead anywhere. So you have to essentially offer the sense that the market is getting unstuck. We have been stuck. You're in this narrow range within a larger range. All that stuff. We've now held the bottom of it. So it's a net positive. I do think that, you know, sediment is pretty defensive and cautious, which is, again, is a positive. But you really do want to see some sustained buying demand as opposed to just this valuation compression, people allocating out of big cap equities, which is what's going on all year. And to your point about Taiwan Semi overnight, I mean, expectations aren't that high for

the banks, right? That's right. So that just becomes a more important read for investors than the banks, which may not deliver much. Their stocks haven't done anything but disappoint. Absolutely. Banks and semis, by the way, if you look at a two year chart, they look really similar in different dynamics, not the same drivers. But in terms of a cyclical gauge of risk appetites, they're both kind of wallowing here in a tough range. Good stuff, man. That's Mike Santoli's last word, as always.

All right. Coming up after the break, it's, of course, our two minute drill. Some retail plays for your portfolio. We're back right after this. Back in overtime to the results of our Twitter question now, which sector is going to perform the best this earnings season? The majority of you said technology. Others writing in energy, I suppose, for obvious reasons. But 60 percent think tech. All right. It's time now for our two minute drill. Top stock picks for your portfolio with a focus today on retail and the consumer. Let's bring in Westwood Quality Value Fund co-portfolio manager Lauren Hill. Welcome back. So we're still focused on the consumer, this time with a few different names. Burlington is name number one. Please tell me why.

Yes. So Burlington's not price retailer. That's a beneficiary of inflation and supply chain issues. As prices rise, consumers are seeking bargains. And when they shop Burlington, they can get a 40% discount off their favorite brands. So we're seeing traffic very healthy there. Also, as the ships arrive late in L.A., it lets them cherry pick even more great values of all the excess that's coming in and arriving late. So they're able to reach for brands they normally can't. They have 840 stores that's going to 2,000. So they have a very long runway of growth ahead of them. The CEO used to run operations at Ross stores. And so he really knows what it's going to take

to raise margins over time. Stocks down 27% year to date, really treating at the intersection of quality and value. Okay. How about Bath & Body Works? Yep. Bath & Body Works, another wonderful reopening play. People really miss buying fragrances, lotions, soaps, sanitizers, those kinds of things during the pandemic. Now retail store traffic is up 10% versus pre-pandemic. So people are really moving through the mall again. People also have their social calendars filling up.

So they're getting together with friends and family, buying gifts from Bath & Body Works more often. And they mostly have a U.S. supply chain, which is a huge benefit. I think supply chain issues in 2022 are going to be even worse than the past two years. And the stock's really a wonderful value trading down 27 percent year to date. So Skechers is your last one. But I want to ask you more importantly about Estee Lauder, which you picked last time. And that was at the end of March. That stock's down almost 5 percent since you picked it.

Can you give me just 20 seconds on whether you still like it? Yeah, still really love Estee Lauder. Actually was talking about it today. Just a huge growth opportunity in Asia as more people move through the airport. Their very high margin retail business continues to climb and that's going to help them both for sales and margins near term, long term. The growing middle class in Asia is a huge opportunity for them. Love the stock. Okay. And as I said, Skechers was your other pick.

Callaway Golf last time, too, down 5%. 1-800-Flowers last time, up 4%. I appreciate it, Lauren. Thank you. We'll see you next time.