Closing Bell - Closing Bell Overtime: Time to get more positive on stocks?

Episode Date: March 15, 2022

Stocks closed near session highs, but can investors trust the rally? Trivariate’s Adam Parker, SoFi’s Liz Young, and Solus Alternative Asset Management’s Dan Greenhaus debate the “Talk of the Tape” and whether it’s time to buy right now. Billionaire Investor Marc Lasry weighs in on why he’s negative on China and where else he sees opportunity. And, Pete Najarian makes a late-day trade in ARK Fintech (ARKF). Plus, Wedbush Securities’ Dan Ives zeros in on his “Most Valuable Pick.”

And welcome to Overtime. I'm Scott Watney. You just heard the bells. We are just getting started. We'll speak exclusively today to billionaire investor Mark Lazzari on where he is finding opportunity in these markets. We begin, though, with our talk of the tape. A nice bounce for stocks. You can say that again. But can you trust it? That's the big question. We're all wondering that now. And some big name investors suggest it really is time to buy stocks, even with so much uncertainty still out there. Let's take it right to our OT panel. Joining us today, Trivari, it's Adam Parker. So far, it's Liz Young and Solis Capital's Dan Greenhouse. He is here with me at Post 9. It's good to see you in the flesh. It's good to have everybody with us. All right, Liz Young, I begin with you.

Yesterday, Brad Gerster said, maybe time to take a look. Tradeable bottom. Scott Minard was on closing bell yesterday, said valuations have come down a lot. Maybe it's now time to buy some stocks. Do you agree? So I still will never call a bottom. But some of the confirmation that we've been looking for, things like you want to see the put-call ratio extended. You want to see flows actually accelerate outward. We are seeing some of that. We got the death cross on the S&P. So some of these things that we hadn't gotten yet, we finally got this week. And I think that that's an indication, especially coming into this Fed meeting, that we're finally here. We can maybe take a breath. And then you look at things like the NASDAQ down 20 percent in

bear market territory from its all time high. That's enough of a flush without a recession where you could see a pop in the near term. OK, Adam Parker, I mean, you've been more optimistic than most, I think it's fair to say say I had Tom Lee speaking of Mr. Optimism on the halftime report today from Fundstrat. I want you to listen to what he said. We can react on the other side. Sure. For our clients of Fundstrat and FS Insight, we have warned them that the first half would be quite treacherous. So I don't think we've been advising buying the dip necessarily. We thought we'd end the first half flat. But for going forward, I don't think investors can get hurt. I mean, the risk reward is just too strong.

All right, AP, the risk reward is just too strong right now. Do you agree? I don't know how strong it is. I don't think any of the panelists can really predict short-term movements in the market. I think we all are intellectually honest enough to admit that. So I stick with a medium to long-term framework. I think we get 2% to 3% dividend plus buyback. I think we get a couple percent lift from new companies that enter the S&P. I think we get 3% to 4% organic earnings growth. So I think it's like an 8% total return algorithm for the S&P and that generally looks better than other asset classes. I think it's like an 8% total return algorithm for the S&P. And that generally looks better than other asset classes. I think it could be choppy if people doubt

that the Fed can thread the needle. But I still think the base case is earnings grow this year. And I still think the base case is they grow in 23 versus 22. But if we're really being intellectually honest, Scott, I think you have to say the probability 23 earnings are below 22 are not quite as good, not quite as high as it was three months ago. I think you have to say the probability 23 earnings are below 22 are not quite as good, not quite as high as it was three months ago. I think that's probably the best way I'd summarize it. So Dan Greenhouse, where are we now? Is it time to say, OK, valuations have corrected enough? If I give you the stats, the forward P.E. on the S&P is at 18 and a half from 22. Nasdaq's at 25 from 32. Not all that long ago. No, and listen, again, most of the

decline in the equity market can be explained by valuation compression rather than, to Adam's point, earnings compression. But I think it's really important to remember that while I think, while I agree with Adam that predicting short-term movements in the markets is really a fool's game, you are, to Liz's point, some things are sort of setting up here for a bounce. Obviously, this is dependent on what's going on in Ukraine. But the big issue is what happens in, let's call it 12 to 18 months, as the Fed begins hiking interest rates and begins winding down its balance sheet. It's just factually honest to say the Fed has effectively never engineered a soft landing. Maybe once or twice here or there, you can argue. But generally speaking, they tighten until they break things. And so for investors, the issue isn't in the next month, did they tighten by 25 or 50 basis points? What does

2023 look like? And do I need to prepare for that? Look, at some point, you have to say, look, valuations have corrected enough. Stocks have come down enough. And if I'm a longer term investor, maybe now is the time to the points that Brad Gerstner made, that Scott Minard made, that others on the Halftime Report today made, and that others are going to make in the days ahead. Sure. The worst is over. Well, maybe for now. I think the issue that we wrestle with is the stock market. And again, it's Adam's point about companies coming in and coming out is an ever moving entity, so to speak.

But the problem is when you look at valuations on a whole host of metrics compared to history, its own valuations, the stock market is expensive by every single measure except for one, and that's when compared to bonds. And the backup in rates and yields really throws into question the sort of the Tina argument that a lot of people have put forward. All of a sudden, if the Fed's going to hike four or eight times, you're going to have some competition there, and that's going to be something that we're going to have to wrestle with. All right, so we're going to find out, Liz, tomorrow, right? The big payoff from Jay Powell is going to come tomorrow afternoon. And then we're going to talk about it. We're going to talk about it with Jeffrey Gundlach

right here tomorrow, which I can't wait for. What's the over under on hikes? Is the Fed going to be more aggressive or are they going to be a little dovish now? I hear both sides of the fence now. Well, I think we know what's going to happen tomorrow. Iish now? I hear both sides of the fence now. Well, I think we know what's going to happen tomorrow. I mean, Jerome Powell told us a couple weeks ago what's going to happen tomorrow. It's going to be 25 basis points. I think from a rate perspective, they have to be gentle because if they go too far too fast, the market is going to think they're way behind the curve and they don't want to send that signal. But if the consensus view is six hikes this year,

and that's what the Nasdaq has priced in is six hikes, I'll take the under on that. I don't think that they're going to have room to do six hikes to the point that was just made. A soft landing seems really elusive here. And I think they're going to have to pull back on this hawkish stance as the year goes on. So if that happens, you're going to see something like the two-year yield rally a little bit. You're going to see tech stocks supported in that if we get a more dovish message. I don't think we're going to get a dovish message tomorrow, but we could get one in May or June. Liz, just to push back real quick, and I'll throw it to Adam to chime in here as well. I don't really think that the Fed, any message they send tomorrow one way or the other matters. They are

behind the curve. I don't think whether they tighten by 25 or 50 basis points changes this larger idea that they made a humongous mistake over the previous 12 to 18 months by not at minimum winding down their asset purchase program. And so again, whether they tighten by 25 or 50 basis points should be irrelevant to virtually every investor. They are behind the curve. Isn't that right, Liz?

Yeah, well, I think that statement happened in November, though, when they retired the word transitory and admitted, okay, it's not transitory anymore. That's when we all realized they were behind the curve. And the market reacted to it between November and now, where we've had this huge correction. Now, I think the issue here is that they don't have all the tools to fight the problems we have.

Their main job is to control inflation. And the only way that they don't have all the tools to fight the problems we have. Their main job is to control inflation. And the only way that they can really do that is to hope that demand relaxes, but not so much that it breaks the consumer and throws us into a recession. So this is a really tricky job of threading the needle. And I agree, they're up against a really hard spot. I don't know that there's going to be a clear solution to this from them in the first couple months of this cycle. Yeah, I feel like, Adam, I wonder if people are kidding themselves, the ones who are trying to convince themselves, oh, because now you have the situation in Ukraine. Now we have a little bit of uncertain economy. The Fed is going to turn more dovish than we

thought they were when they basically said they were going to put the pedal to the metal big time on hiking interest rates. And then I hear people say, well, maybe earnings aren't going to be as bad as people think. They could hold up in the face of all this negativity when revisions are already picking up to the downside. How about that? Are we kidding ourselves in thinking that the landscape is going to be better than it actually will be? Look, three of the last 12 hiking cycles, here are the facts. They were able to execute it without creating a recession. So, you know, it's a small sample size, but there's some precedent. It's not great.

There are a number of cycles, though, where there was an economic recession and earnings didn't go down. And since all of us care more about earnings and stocks than we do the economy, in terms of, you know, GDP. I'd rather get the stocks right. There's still maybe a 50-50 chance in my mind that earnings can be up maybe higher than 50-50 next year. And on your point on valuation, Scott, I don't know if that's a great short-term predictor, but I will say the long-term average the S&P traded at is 17 times forward earnings. I think the market is just a superior market to much of history. So things like CAPE and Shiller PE and the grant them argument for mean reversion really don't make sense to me.

Because think about large cap companies in the market. Gross margins this cycle in 2020 troughed above the peaks of prior cycles. You just have a superior set of companies and earners here than you had when it was a much more capital intensive set of corporates in the past. So I don't know what fair value is, but it's certainly above 17 and a half times in my mind. And if this is sort of going to be a choppy period, I still think ultimately on the other side of it, you're going to see pretty good earnings growth mid-single digits or higher. So I'm more optimistic than I was. I think you will have big inflation in wheat and soy and corn. And the two things I'm focused on than I was. I think you will have big inflation in wheat and soy and corn. And you want to, I'm looking, the two things I'm focused on this week, Scott,

what are good consumer short ideas where expectations for their margins are too high? And where do I think gross margins are achievable? Because the way you pick winners and losers in the stock market in a six-month out view is where our gross margins are achievable or not. And that's what most of my clients are focused on. Greenhouse valuations matter though, right? I mean, we got way, way ahead of ourselves in some of these names.

And if we're reverting back to whatever historical metric you want to point to, whether it's pre-COVID, so in February of 2020, are we supposed to go back there? This reset in valuation has been dramatic, especially in tech. It matters as to whether it needs to correct even more or whether we've done it enough. No, I think that's right. And listen, again, fair value is a moving target. To Adam's point, judging the S&P 500 relative to its own history, obviously, is filled with all sorts of potholes for a number of reasons. I think the one pushback I would put to Adam about previous Fed tightening cycles is we've, I mean, all of us discussing this

today and virtually every investor watching this have never invested in an environment with an inflation rate and a durability of inflation, the likes of which we're experiencing now. And when you divide up expansions throughout history, those with low inflation, which is basically our entire lifetime, have gone on for longer, both bull markets and economic expansions. And those characterized by high levels of inflation have been much shorter because the Fed has had to step in to bring that inflation down. is that the investment landscape of the previous 20 years is to some degree irrelevant because we have, again, never experienced an inflation rate that next month very well may be north of 9% and on an outside chance hit double digits. And that's something that we just are not familiar with. AP, answer that. It reminds me of years ago when I was a semiconductor analyst, Judge. I was asking about gross margins for Intel. The CFO said, hey, Adam,

it's a 19 variable problem and you're trying to isolate it to one. And then everyone laughed. I think I'm guilty of that. I think all of us are trying to figure out this one variable. And I totally agree with the point that there really is no perfect historical analog to today. So what would be easy for all of us is if we said, oh, it's exactly like 1978. And then we just look at what sectors and industries and signals worked then, and we told people to do that. But I think the starting point on CPI is higher, but the tenure yield was higher. You know, there's just physical – there's so many different things

that it's very hard to find that perfect analog. And so I think it's more important to try to pick the winners from losers on estimate cheap ability than make this market call. I think that's what most of our clients are focused on anyway. And I agree with your point. It's just hard to isolate, you know, to one variable. So I personally think, yeah, I was going to agree with Liz. I think they're going to move a little slower in the near term than the consensus. I think six or seven. We're going to find out. I mean, we are going to find out 24 hours from now. We're going to be having a conversation on what the Fed just said. Either we're going to be shocked by it or we're going to be like, OK, that makes a lot of sense.

And stocks are going to move relative to what they say. I want to focus on technology for a second, because, Liz, we asked the question yesterday. Since we're asking the question today, is this a real place to buy stocks? If tech doesn't find its footing and today doesn't a whole trend make i get it it's a great day and a lot of the stocks that we worried about yesterday had a nice bounce but what about technology it needs to stabilize or this conversation is moot the market can't if tech doesn't yeah but there's a difference between it stabilizing and producing outsized positive returns i think the more likely

scenario is that tech stabilizes once we get past this first hike. So usually once you enter a hiking cycle, you get the lead up to the hiking cycle and cyclicals do pretty well. And then you get into the hiking cycle and you see those growth stocks stabilize, find their footing and come back. Now that doesn't usually happen until six to 12 months out. But if that's the case and we have our first hike tomorrow, then you want to start looking at technology and legging back in, being careful about it, but legging back in sometime in the second quarter. And then hopefully we see that stabilization before the end of the year. And then we would need other sectors. And if I were going to choose some sectors,

I would choose things like financials. I would choose health care. We would need other sectors to come in and support the market. I don't know that we're going to get that positive of a return out of the market. I mean, honestly, at this point, 11 percent down on the S&P, I'd be OK if we ended in positive territory, period. But it doesn't mean that tech has to be a huge winner. We just need it to not drop too much further. It's funny. I mean, look, flat may be very much feel like the new up. I've been thinking a lot about that, depending on what the rest of this year holds relative to the pain that we've already experienced. All right, Mr. Former Semi-Analyst, how about this idea of technology? Are you worried about it right here?

Look, we analyzed all the prior growth sell-offs of 10% or more. What our work shows is that it's too early to buy the sort of profitless ones that have incredibly high price-to-sales multiples and have negative free cash flow. So I think it could be a little bit of a bifurcated recovery. You first go into the ones that have the positive cash flow and margin expansion, and then later on, maybe you can get the more go-go names as things settle. So I'm kind of neutral on the sector myself. I kind of agree with you that it's hard to have the market rip higher without bigger participation in tech. And I don't think we're there yet, particularly if people think rates are going to rise. I did want to say, Scott, that it's an honor to be on the first week of your new program. So thanks for having me in the loop. It's a honor to be on the first week of your new program, so thanks for having me in the loop.

It's a great show. You're a good man, AP. I appreciate that. It's a pleasure to have all of you with us. This notion that technology, and I think obviously it's the largest part of the S&P, that's why we focus on it so heavily. If you can't get traction, what do you really have? Well, first of all, about tech, and I saw on the Halftime Show the other day, you guys were talking about, can the market move higher without Apple? And without expressing a view on Apple, I was reminded of the period, I think it was 2012,

2013, when people were discussing the NBA market, the nothing but Apple market. And Apple ended up falling by 20% or 25%, and the market went up by 6% or 7% because other leadership stepped up. And so I'm not so sure that the market cannot go higher without participation by tech. But obviously, it being the highest weighting, it would be statistically. Let's put it this way. My overall point is the fact that if Apple started to roll over, if Microsoft followed suit, and then the mega caps of the technology sphere started to roll over. I mean, in some respects, that's the only thing that's kept the NASDAQ from really having

a massive correction. That's right. And that's my point. If that happens, you have a whole different ballgame to talk about. As many commentators have come on and pointed out, beneath the headline in the NASDAQ is just a minefield in a wasteland. But a bloodbath. But listen, I can only speak for us and Solis.

We still see value in some parts of the energy space, although obviously a lot of that trade has played out. Good chunks of the media and content space and the distribution space are areas that we find attractive. And so I think, again, we talk about things very much at a headline level, and rightfully so, because that's what drives the headlines. But beneath the headline, you have had a 12, 10, 12 percent sell-off in the S&P, a much larger sell-off in the NASDAQ, and a commensurately large one among small caps. There are plenty of opportunities there, whether you think the economy is going to a recession or

not, that over a more sustained time frame will provide for the track record. Oh, you've had a stealth bear market in many parts of the market, and in some cases, a slap in the face, not so stealth. You know, I'm kind of surprised, Liz, to be honest with you, that you said financials are the place that you want to be for this year, just given the kind of thing we're talking about. I mean, I understand if you think rates are going higher. I thought it was very interesting that Scott Minard yesterday said they were maybe topping out. The 10-year was at 2 to 2.25 percent. If we're worried about a slower economy, maybe the financials aren't the best place to be, despite the fact that they may look

nice because they've been beaten up. Think about how financials make money, though. So it's not just about what the 10-year is doing. It's about the fact that the Fed is going to raise rates. And then when the Fed raises rates, the prime rate goes up. So if you're lending as a financial institution, you're making more money on that raise in the prime rate as the year goes on I do think that that takes place the other thing is at different parts of the economic cycle people borrow different types of money so if you look at maybe personal loans if people have to start taking out personal loans banks make more money on personal loans and they do

on something like a 30-year mortgage so I think we're set up this year for banks to still do okay with earnings, and they're one of those categories that in cyclicals can still do well even if we have terrible growth concerns, where normally you'd say industrials would do well, something like materials. If we have growth concerns around the globe, you see those sectors continue to get hit. You'll see consumer discretionary get hit. But financials might be able to hold up as the Fed raises rates. All right. Good stuff. It's good to have everybody with us today in overtime. Liz Young, Adam Parker, Dan Greenhouse. We'll see all of you again soon, I hope. Now, tomorrow,

don't miss our exclusive interview with DoubleLine Capital's Jeffrey Gundlach right here on Overtime, reacting in real time to what the Fed just said. Let's get to our Twitter question of the hour today. We want to know how many times do you think the Fed is going to hike rates this year? Three times, four times, maybe five, maybe more than that. You can head over to CNBC at CNBC Overtime, cast your vote. We're going to read the results by the end of the show. And by the way, we're going to do it right now. I thought we were going to do it after the break, but Pete Najarian has called in because he's making a move in the after hours,

in overtime, and it plays right into this conversation. Pete, where is it? Well, it's in ARK FinTech, Scott, and we talked about this one just the other day, and those stocks were absolutely getting hammered to the downside. A lot of put buying in the ARK FinTech, the ARK Innovation, the ARK Genome, all of those had big put buyers in it. But it was the ARK FinTech that really moved. It went from 26.5 to 23 in almost the blink of an eye.

I thought it made a lot of sense to take that off. Well, I'm right back in the trade again because they came back again today with the stock trading right around 20, call it 23 or so, and we had a huge put buyer again. Actually, I think it was closer to 24. They bought 15,000 of the April 23 puts. So just looking for another move to the downside after a bounce back of 5%. We'll see if they're going to be right.

I am in that trade, Scott, and I really enjoy what we're seeing in these ARCs. It's not because of anything negative about Cathie Wood, but they've been so right when they've been buying these puts on the way down in these high multiple, no multiple stocks. I can't resist not being a part of it. No, I hear you. I mean, we've been noting the fact, it's really stunning to see the fact that the SARC, the short ARK ETF, has been at a higher price than ARK. That gives you an idea of where sentiment has been. And as I said to you, I think it was yesterday or the day before, Pete, on the half, they've been coming for these things from all sides. You mentioned many of the different ARK funds under the umbrella that have been getting targeted. I mean, I can't think of another way to say it.

Yeah, I think you're exactly right, Scott, and it's been an interesting thing. I have not traded this ARK at all, just so you know, but I still have a little piece of ARK, the innovation, and now I'm right back in the fintech. And it might be short-lived, but if we get the kind of moves that we've been getting, these velocity moves each and every day to the upside, the downside, it made sense to me on an up day, it's the opportunity now for any kind of a pullback over the next couple of sessions. All right. I love it, Pete. Thanks for calling into overtime, sharing with us your trade. I'll see you on the half. That's

Pete Najarian coming up next, billionaire investor Mark Lazzari. He joins us. It's a CNBC exclusive. He just made a big reversal in one key global market. You want to hear his view on that, why he changed his view. We're back in overtime, joined now exclusively by billionaire investor Mark Lasry. He's the chairman and CEO of Avenue Capital. Welcome to Post 9. It's nice to see you after all this time. No, thank you. It's a pleasure to be here. So we're talking about the market environment that we're in, this volatile environment, which makes you smile, makes us nervous, and the people watching nervous. do you feel like this volatility is going to continue? Yeah, it is. I mean, look, what's happening is the market's reacting to all the news that keeps on happening. And, you know, if oil shoots up, market goes down. If there's some really negative events that are happening in Ukraine, the market will get more nervous.

You know, if I had said to you, think about it, I think in June of last year, if I said to you, look, the S&P is at 4,200. And in nine months, inflation is going to be 8%. Oil is going to be over 100. And by the way, you're going to have a nuclear power invade a neighboring country. Would you have thought the S&P would be the same? I would have thought it may be a lot lower than it is. That's exactly it. I would have thought it'd be a lot, lot lower. And so what you're seeing is a lot of this is really what's happening with the Fed.

And the Fed, tomorrow is going to be a big day. Because if they say that rate, they're increasing by 25 bps, then what they're telling you is they're a little nervous. And, you know, they're trying to make sure the economy is going to be fine. And you may not have those seven rate increases. You may have them, but they may only be 25 bps as opposed to 50 bps. So is that what you say? If they go 25 tomorrow, it suggests that they're too scared to do the 50, which you think they should? No, I don't. I think right now in today's environment, they should be doing 25.

I think at the end of the day, what's happening today is nobody really knows what's going on. And when you don't know and you have uncertainty, be a little careful. And that's what the Fed is going to do, because what we're seeing in our world is there is a lot of volatility. There is a lot of uncertainty. That uncertainty is actually beneficial to us. Well, that's why I said at the outset, like, volatility picks up. Lasry smiles because it makes more opportunities as everybody else is feeling queasy about the world. Right.

And we have long-term money, so we're happy to invest in an environment like this because we still believe at the end of the day we're happy to invest in an environment like this because we still believe at the end of the day, you're going to have positive GDP. It's just capital scarcer today because people are nervous. So it really caught my attention and our producers as well. When you told the producer who pre-interviewed you that your view on China has changed. How so? Well, I think what's happening in China today is because of COVID, their strict no COVID policy, that's going to have an impact on GDP. It just is. And you're, you know, when you really think about it, why is our country opened up? Because a lot of people caught COVID, right? The problem in China is as they open up a little bit, all of a sudden people start catching it and they get nervous again, they close it back down.

That's actually, that's not good because what that means is they're going to keep on slowing things down. GDP will go down. Supply chain is going to have issues. So for us right now, I want to invest in Asia. I don't want to be investing in China because I think that's just going to take a lot longer than people think. What are the better markets to be in besides China there? I think today Australia is actually for us. We're seeing India. There's huge opportunities there. So Singapore, which has opened up.

So areas that opened up, they're not going to be as nervous if you get more COVID cases. We're not going to be. I don't think we are in the United States. I think it's become endemic as opposed to a pandemic. But, I mean, you had offices there, an office. You were lending there. Does this mean that that's dried up? Like, are you leaving?

No, it means we're slowing down. We actually moved our office from Hong Kong to Singapore. And the reason we did that is because we were nervous about this no COVID policy. So for us now, we're in Singapore. Because if you go to Hong Kong, you've got to quarantine for 21 days. How would you like to just not move? So you've got to be able to travel. That's having an impact.

We see that impact. So for us, we're right now investing outside of Hong Kong, outside of China, because we just think there's going to be issues for the next six months to a year. The other thing I thought of and I texted you about this was whether you were buying any Russian or Ukrainian debt, because you're the kind of guy who looks at potentially those types of opportunities. Is this one too hot to touch, though? It's too hot because what you don't know is what's going to happen to those companies and especially with Treasury. Like, are we allowed to do business? Are we allowed to do something? It's just there's too much unknown today. And that's why prices are really low. But I don't want to sort of make a political bet. You know, I want to make an economic bet. Right now, you're making political bets if you're buying those bonds. I mean, sometimes you would

have looked at a situation like this. Did you at least put your foot in the water, take a look and said it's just too hot to get in? We did. But the problem is these sanctions are you there's going to be more and more. And I don't know what the full impact is going to have on sort of our ability to collect on the bonds. I mean, you're seeing in Russia today, they're saying that if you say if you're a Western company and you've got an office there and you say anything negative, you could get arrested. I mean, there's too much going on for us to be buying those bonds. Are you buying sovereigns anywhere? No, no. Normally we'd be buying the debt of the companies.

I just think today I'd rather wait until I know a little bit more. Do you feel like once the Fed, if we spin it forward again to what's going to happen tomorrow, once we know that the world will become a little less volatile in terms of markets, are we still going to have to watch inflation numbers every month? We're still going to be worried about whatever they say, whenever they say it. You are. You're going to be a little calmer. But after tomorrow, I promise you next week, next question is going to be, what do you think the Fed is going to do at the next meeting? Right. Where do you think race? Does this mean it's 25 bips or 50 bips?

So I think there's a it'll be a little bit calmer, but then you've got to go see what the pattern is and what happens, you know, sort of the next time around. But I think the market is now sort of convinced that the Fed's going to take things a little slower. We were talking about that with our panel before you. I just wonder whether it's wishful thinking for some at this point that inflation is such a problem and the Fed is convinced it has to tackle it almost by any means necessary, that despite all of these concerns, even geopolitical ones, they're going to do what they have to do. Yeah, but it depends. You're right. Inflation, the one thing you don't want is a recession. You'll deal a little bit with inflation. You don't want a recession because that actually will impact people a lot more. So I think the Fed is going to be kind of

slow. And I think the market sort of sees that. OK, so on that note, we'll finish with, I want you to take our Twitter poll. We ask people, how many hikes do you think you're going to get from the Fed? Three, four, five, or five plus? What do you think? I don't think it's five plus at all. I think it'll be at max four or five. Did you think it was once five plus? Yes, I did.

If you had asked me three months ago, I think it was once five plus? Yes, I did. If you had asked me three months ago, I would have told you five plus. I think today with what's happening in Ukraine and what's going on around the world and where oil is, you got to be a little bit more careful. Interesting. It's great to see in person. Thanks for being here on Overtime. No, thank you for being on this show. All right. Thank you. That's Avenues Mark Lazzari joining us there. Coming up, cyber warfare is well underway with Russia. That is the headline today from one top tech analyst. Now he's playing it with the stock we are crowning today's MVP.

Our most valuable pick. We'll do it next on Overtime. We're back in overtime. It's time for a CNBC News update with Shepard Smith. Shep? Hi, Scott. Thanks from the news on CNBC. Here's what's happening now.

The humanitarian corridors in eastern Ukraine appear to be holding as people try to evacuate. The Ukrainian government now reports about 29,000 people were led out of the carnage today, most of them from the city of Mariupol. This as the United Nations announced what it called a terrible milestone. Three million people have now fled the country since the invasion started. The U.S. Senate is voting right now on the nomination of Shalonda Young to run the Office of Management and Budget. Young has bipartisan support on the

Hill. She would be the first black woman ever to be confirmed to the job. OMB director is a cabinet-level position. And a massive cargo ship stuck in Chesapeake Bay today. Evergreen owns it. That's the same company that had one of its ships stuck in the Suez Canal back in March, blocking traffic for more than a week. According to a marine tracker, this particular ship is unfortunately called the Ever Forward. It ran aground near Green Gables, Maryland. The company reports it's inspecting the tanker for damage and working on a plan to get it floating again.

Tonight, a Ukrainian-American struggle to keep in touch with one side of her family in Ukraine as she cuts off contact with the other side in Russia. Her difficult story on the news right after Jim Cramer, 7 Eastern, CNBC. Scott, back to you. All right. Good stuff, Shep. We'll see you then. Look forward to that. Thank you. Up next in overtime is the time to start buying beaten down tech. One halftime trader just made a bold move in that sector. We're going to break it down in overtime, halftime overtime. And oh, by the way, somebody else is calling in with a trade next. Don't go anywhere. Oh, we have another alert in overtime. Steve Weiss joins us now with an overtime buy. What do you have, Steve? Thank you for coming on.

My pleasure, Scott. Hey, new show is phenomenal. I love it. I bought Micron. So I've been looking at the stock. I it's just gotten so cheap that I just had to go in there. I mean, stock's always cheap, but relative to its historic valuation, I mean, you're talking mid-single digits at this point. And not that long ago, as a matter of fact, just about a couple of weeks ago, before all this started with Russia, which doesn't impact these guys at all, the stock was at 90 and really trending a lot higher. So I thought I had to step in and trade down to 69 yesterday. And that's it. I own it. Yeah, I mean, the chips have had a great day today. Lastly, before I let you run, I do got to run because I'm tight on time. Tradable bottom, do you ascribe to that point of view, especially in tech, some things like this? Some things, but I wouldn't go all in here. I still think that there's some risk to the market.

And, you know, it takes my time, but selectively you can buy. All right. I'll catch you on the halftime show. Steve Weiss, thank you. Okay. Appreciate having you in overtime. In today's halftime overtime, a bold call by Kerry Firestone, who says now is the time to start buying some of the most beaten down growth names. Listen.

List of stocks, 50 names in the Nasdaq plus that are 50 percent down from their 12 month high. And many of them are earning big dollars, lots of cash flow, selling at multiples we think are reasonable. You have to begin to buy them. That is Twilio, PayPal, Shopify, DraftKings, Zoom, Block, Square, whatever. I mean, these are names that have been destroyed. I mean, this is the sort of thing at the bargain rack at, you know, at TJ Maxx. It's not easy. All right, let's bring in halftime investment committee member Jim Labenthal. What do you think, Jim? Is now the time? Well, I do think, and it's not just

in beating down tech stocks, but first of all, I'm so honored to be on the show with you. It's going great so far, Scott. Scott, listen, I've told you, I think for several weeks, I think this is the time to buy. I've been buying over the last three weeks. It includes a tech stock like Nvidia, but it includes cyclical stocks like Citigroup. I'm sorry, not Citigroup, JP Morgan, Wynn Resorts. And here's the thing. We all see what's going on with Russia, Ukraine. But here in the U.S., you see the airlines today ripping because at the JP Morgan conference, they're saying demand is better than they expected.

You see TSA traveler counts going up. You see Las Vegas room rates going through the roof. The U.S. is in great shape. I just don't see the recession that would keep me out of the markets. I don't see it anywhere nearby. Kerry did mention Twilio, which is in your universe. Yeah. So and you just had that graph up of hyper growth where I'm less than 5 percent. That includes Twilio. I will be adding to Twilio. I need to see the 10-year top out first. You're close, but not there. This is a long duration stock. So as interest rates move higher, it's going to have a hard time. I think you'll see the 10-year above 225. And then I got to start adding to Twilio and PayPal and Salesforce.

All right. The guy we call Mr. All In, Farmer Jim, whatever you want to say, Jim Labenthal, thanks for being in overtime. I'll see you back on the half. I know sometime soon. Up next right here, today's most valuable pick. Wedbush's Dan Ives says now's the time to invest in cyber stocks. He joins us with his MVP, his number one stock in the space. OT's back after this. All right. Welcome back to Overtime. Time for a segment we're calling Most Valuable Pick,

a stock you need to know about, chosen by a money manager, an analyst, somebody in the know. Today, it is Wedbush Managing Director Dan Ives. Welcome to Overtime. It's good to see you. It's great to be here. Your Overtime. It's good to see you. It's great to be here. Your Overtime MVP pick, it's so funny, we just had the CEO on in closing bell. Palo Alto, why so? I view it as a table pounder. I mean, in my opinion, cybersecurity, this is the facet of tech.

We're talking about spending of 4 or 5x overall IT spend. Palo Alto, this is a cloud renaissance name. You're seeing more and more spending. I think numbers could be underestimated by potentially 10%. It's a re-rating name. This is one I think in a bull case could be a $700 stock. I mean, a table pounder. You actually, what got my attention on this today is I saw a tweet from you, which said, based on our conversations this week with contacts in the Beltway, D.C., U.S., Europe, enterprises in Israel, growing concern that cyber warfare is well underway with Russia. So you think it's already happening and this is the best company positioned to deal with that for companies that are paying money to companies to do it? Clearly, I mean, I think threat levels are already up over 20 percent over the last week or two. We're seeing significant threat levels across the board.

CISOs that we're talking to, as well as within the government, Beltway and within Israel. I look at Paolo. I think that's front and center. And there's things like Zscaler, Checkpoint, CrowdStrike and others that are significantly going to benefit in a subsector that I think could grow 25 percent. But Palo is one based on their cash flow, based on the growth, based on the install base. I think this checks every box. And then there's this stock. We look back a year from now. And I think this is really a golden opportunity to own. Now, I could say my last question, I could say I look at the performance 52 week high, how much it's fallen from that. I say, OK, it's much better

than the group. It's only down 10 and a half percent from its 52 week high. So I could say, all right, that that checks the quality box maybe. But then I look at some of the other names and I'm like Palantir's down 63 percent, Checkpoint 63%, Zscaler 48%. Maybe there's more bang for my buck in some of the stocks that have gotten destroyed. It's a great point. But I think in this market, you want to be defensive and offensive. The defensive, I love it on a free cash flow basis, install basis, as well as valuation. And on the offensive, as we start to see more and more of these numbers, these cyber attacks,

Pal is one that's going to significantly benefit. And that's why it's one I love in this type of market. Overall group, it's been our favorite. But I think Powell is the one, that's the one that you put a circle around. All right. Pounding the table, a table pounder. That's what he said. Dan Ives, I appreciate you coming to Overtime. We'll see you soon. When we come back, Mike Santoli joins us with his last word. Today, it actually is one word flexibility. They'll explain next. All right, our man Mike Santoli is here now with Santoli's last word. We said it's one word.

It's flexibility on whose part on Jay Powell's part. I think the market always wants two things out of a Fed meeting. One is for it to be over because I feel like you don't want it always hovering out there on the forward calendar. And then when it's over, usually the market is freed up to do kind of what it was going to probably do anyway. But flexibility is something that I think should be conveyed. In other words, they're not going to be on autopilot with a lockstep group of rate hikes. Look, I think that's likely what's going to happen. There's a lot of room between what the market has priced in and what the Fed had previously indicated in terms of its outlook. So there is room to seem flexible and still seem hawkish.

I think the other option is if they feel as if they don't really care if the market goes down more, if financial conditions tighten more because it helps the fight against inflation. That's the message I don't think Wall Street's really ready for. it goes down more, if financial conditions tighten more because it helps the fight against inflation. That's the message I don't think Wall Street's really ready for. If the market, you suggest, is pricing in now seven rate hikes? Yeah, by market height. Still? Yeah, pretty much.

If you look at the short-term treasuries, it does feel that way to be confident in it. Now, if things clear up in terms of, you know, financial conditions, growth comes through, labor market looks great, and all the rest of it, and, you know, financial conditions, growth comes through, labor market looks great and all the rest of it. And, you know, somehow we get through this geopolitical mess. Fine. One per meeting, one quarter point raise per meeting makes some sense. But I don't think that you have a high confidence that they're going to have the clearance to do that. When you said the one word is flexibility, I wrote down at the moment you were saying it's certainty because you're not going to get certainty out of this Fed meeting. There's no way you get certainty. You get a little bit of a clearer view, perhaps.

The other word is humility. Sometimes Jay Powell says, look, you have to be humble when you're creating an outlook, when you're trying to predict things. Nobody really knows what the inflation data is going to do from here, both good and bad. He has to be aggressive. That's another word to look out for. Yeah. Right. All right.

Hopefully he doesn't say it. We're playing the word game. That he might convey it. Exactly. Well, he's going to make people think it, perhaps. Thanks. All right. That's Santoli's last word up next. The two minute drill top stocks to play right now. Overtime is back right after this.