Closing Bell - Closing Bell Overtime: Twitter Saga, St. Louis Fed Bullard 4/18/22

Episode Date: April 18, 2022

Twitter vs the world? Alex Kantrowitz from Big Technology and Casey Newton from Platformer discuss the latest in Elon Musk’s battle for the social media giant. Plus, is Fundstrat’s Tom Lee getting less bullish? He breaks down his latest market call. And, has the market priced in the Fed’s tightening cycle? Steve Liesman speaks with St Louis Fed President James Bullard.

All right, Sarah, thanks so much. Welcome to Overtime. I'm Scott Wapney. You just heard the bells. We, of course, right here at Post 9 are just getting started. In just a few minutes, I'll speak with Tom Lee about his views on the markets and whether a tweet of his speaks a trillion words. Plus, at this very moment, the outspoken Fed Prez James Bullard, speaking with our very own Steve Leisman, will bring you those headlines which could move futures in a couple hours' time. We do begin, though, with our talk of the tape, the Twitter wars. Musk versus the company, Dorsey versus the board, and now employees versus Jack. More drama by the minute, it seems.

There's a look at the stock today moving into overtime, closing higher by nearly 8%. So let's welcome in and welcome back our experts, CNBC contributors Casey Newton and Alex Kantrowitz. It's good to see you again. As I said, the drama continuing by the minute. Alex, you first. I mean, you were skeptical that Musk was going to get this from the outset. I said the stock's moving higher. What about now?

What do you think? Well, I'm still skeptical about it. I'm open to the possibility that it could happen. With Elon Musk, you never know. But with the poison pill introduced, now preventing it, making it more difficult for Elon to buy it himself, forcing Elon basically to find partners to help him make this move, I'm skeptical that he'll be able to find the partners. I mean, what is the pitch exactly? Is the pitch, help me take this company private to pursue my political goals? Now, I understand, you know, if you're rooting for Elon, that makes a lot of sense. But if you're an investor, is that going to end up

helping you make more money over time? I think that's a really difficult sell for Elon. And I think there's a reason why the poison pill is called poison. And so I think this makes it more difficult for him. I stand by my statements from last week. OK, it's going to be so Casey, let's let's let's talk about some of the drama that's developed, right? You had tweets over the weekend. Now you have Jack calling out the board. Of course, all taking place on Twitter. I want to show you some of the tweets here, which I find very interesting that Dorsey is calling out the board because last I checked, isn't this his board? I mean, he took over in October of 2015 is when he became CEO again. And I look at the board tenure. Most of the board began after he became CEO and has been there since he he left. So whose board is this? Well, Jack Dorsey is still on that board.

We think he tweeted recently suggesting that maybe he left before his scheduled plan of leaving the board next month. But it's a very confusing situation. I think the thing to remember is that Jack Dorsey barely acted like he was the leader of this company, even when he was the CEO. He seems much more interested in it now that Elon might potentially buy it. That makes sense. Twitter is his legacy. But there's a lot of confusion here, and I expect we're only going to see more of that in the days and weeks ahead. But what do you take from his blaming the board, calling it dysfunctional when literally

he sits on that board? He owns the most shares on the board. And if he didn't appoint the people on the board, he at the very least gave the seal of approval because he was the CEO and they were there on the board. I agree with that. But keep in mind that one of the reasons why Jack Dorsey is no longer CEO is that activist investors joined the board and essentially forced him out. They set very high and some might say unrealistic growth targets. And in November, when he left the company, it was very clear that he was not going to hit those targets. So I think there is sort of a history of bad blood between Jack and the board members who wanted him gone because they didn't think he was an effective CEO. OK, now I mentioned as part of all of this drama that we talk about these Twitter wars, right, it's Musk versus the company, it's Dorsey versus the board. And then what I thought was really interesting today was it appears now you have employees versus Jack. And I want to show all of you a tweet that

I don't think got enough attention. But here it is. See Laura Cohen at the bottom. She right there is Twitter's global head of partners. She's an insider, an executive, if you will. I mean, she has a real job inside of Twitter and she claps back at Jack today. If it were up to me, I'd take away likes too, said Jack. Well, she says it literally was up to you. So I wonder what you make of that, that somebody who has a, you know, a pretty big job at Twitter, the global head of partners, claps back, Alex, at Jack. Well, I think it makes a lot of sense. And honestly, it seems like Twitter leadership has acted embarrassingly in this situation. You know, one minute they're welcoming Elon Musk to the board, saying they're so excited to work together with him. Jack Dorsey put him

essentially on par with the CEO, Parag Agarwal, saying, you know saying they'd be great teammates and they're going to work together well. I've never seen that happen with a board member, end up working with a CEO in that way. Usually they're there to advise, right? And now Elon's coming in and he's saying he has no faith in management and Jack Dorsey seems to be behind that. And so, first of all, if you're employees, you were working under Jack for five

years. As Lara mentioned, he had the chance to lead the company. And now he's talking about things that should happen in the product that didn't happen while he was there, all the while basically playing along with this drama. I mean, Lara, I'm sure, is just the tip of the spear with this when it comes to Twitter employees being upset? Casey, Alex makes a really good point. And it's a question I wanted to ask you. The reason we're here in the first place and the criticism of Twitter over the last few years, they can't figure it out. They can't figure out how to grow their users and better monetize. And I'm wondering what responsibility Jack bears himself for the fact that he's in this predicament now that he's even tweeting about this situation?

Oh, you know, he has a huge role to play in all of this, right? There was an enormous amount of frustration with him when he was the CEO. He was a part-time CEO, of course, running Square at the same time, now Block. And investors in both of those companies, I think, really wanted him to pick and to show some focus. And he didn't. And now he's out. So I think Lara probably speaks for a lot of Twitter employees over the years who grew frustrated with the fact that Jack seemed to have a lot of opinions about the product, but wasn't willing for whatever reason to put in the work necessary to see those changes realized. I don't think anybody as it as it relates to, you know, who may end up running this company, whether it's Musk or anybody else, Alex, for all of his genius, I think the three of us can certainly say with confidence that the man is a genius. I mean,

there's obviously the businesses that he's founded and he's changed the world in large respects through each of those businesses. But can he run a company like Twitter? Because he's never run a company truly like that before. Well, look, it'll be difficult. But, you know, there's this famous line that's been attributed to Mark Zuckerberg, that Twitter is a clown car that drove into a gold mine, meaning that, you know, it doesn't really take a lot to administer the feed. Now, I give like the employees credit. You know, there's there has been some product innovation there. There are new features. There is work that's done when it comes to making sure the platform is healthy. I think basically what it would take would be for Elon to not mess with the fundamentals of the way the feed works.

You know, they've made some changes, but largely it functions pretty well. And then he's going to basically, he would basically sit on top and say, you know, okay, like take the memes and help provoke and, you know, cause chaos. I think the main trouble for him wouldn't be necessarily on the product. It would be keeping employees motivated, you know, to work for him after all, everything he said over the past couple of weeks. It seems like he's basically putting the board in a position where, you know, if they don't sell to him, they're going to look terrible because the company is going to start falling apart. And so they might be forced to do that. And if they actually do, then what

does he do with the aftermath of the thing he's acquired? It would be intense. I'll give you the last word. The current CEO, Agrawal, does he need to be more public right now or is his best strategy to say nothing, do nothing and not be public at all? We need to hear a public vision for the future of Twitter from Parag Agarwal. Right now, Elon Musk is fighting a one sided war. And so it's no wonder that he seems to be winning that fight online. It's time to hear what Twitter plans to do as an independent public company if it wants to stay that way. All right, guys, it's good to see you again. That's Casey Newton, Alex Kantrowitz joining us once again. We'll see where it all goes

watching as well. The news feed, make sure nothing breaks in overtime, because if it does, we'll bring it to you now to the markets. Well, we're calling the Great Disappearing Act of the rally. Trivariates Adam Parker is here with me at Post 9. I'm calling it that because we had the PPI on Wednesday. Stocks rally up. Everybody's like, all right, worst is in. This is the peak inflation rally now. What happened?

Where is it? I think people are trying to figure it out still. And maybe, as I told you a couple of weeks ago, I don't think we're going to get more hawkish from here. One thing I've been talking about investors every day lately is, can the Fed raising rates actually solve some of the shortages we have with labor, with semiconductors, with wheat? They say no. Probably not, right? So maybe they're going to act a little bit less aggressively in the end than some people think.

And I believe that. And so we'll see what happens. But certainly, I don't think 789 hikes is what's going to happen. So I mentioned at the very top of the program that Jim Bullard is literally on stage as we speak with Steve Leisman. Right. He might as well walk around dressed like a hawk because he is arguably the most hawkish. And there is the conversation between Leisman and Bullard now. And you better believe that the headlines that come out of this conversation are going to be as hawkish as it gets. So what do you just you cover your ears? You don't want to hear it. You know,'s interesting? If you look at the Fed fund futures and you look at how they trade versus the growth of your industries, biotech, software, life sciences and tools, it was very statistically significant from November through February, March.

And it's actually started to wane recently where the stocks aren't really trading on that as much anymore. And it could be because they're down so much that maybe the risk-rewards got more balanced. Listen, I'm not saying that the Fed won't continue to act. I'm just saying if they act too much, we know it's not going to resolve the issues. I don't believe that they're going to purposely create a recession. And so I think they have a slightly better chance of, quote, unquote, threading the needle than maybe the consensus view. How closely are you watching the bond market? Because that seems to be where the real action is these days. You have the big move up in rates of late.

Did that catch your attention? Very, very carefully. And I think the Fed fund futures is actually even more important because that's the perception of rates, not the reality. And that perception has not moved as much recently after moving much more in the fall and through the spring. So I think that's the key thing to watch. Underneath it, there are tons of opportunities within equities.

In some ways, I feel more excited about the long-term potential in U.S. equities than I have at any time in the last several months. Tons of opportunities in equities? I do. I'll tell you why. 55% of small caps trade below 15 times earnings. A lot of them have earnings growth. So I look at the bond market and I say, okay, 2.5%, 3%, duration risk, whatever I have. Look what I've got in equities. I've got earnings 5%, 6%, 7%. The consensus is 8.5%. I've got a buyback. I've got a dividend.

As you know, we've been massively bullish for a year plus on energy and metals. Those things go up every day, and I think we'll continue to. So healthcare services, there's so many things underneath that have pricing power. So I think it's a great time to be a stock picker after Q1 being a pretty bad time. See, one headline here, markets have priced in Fed tightening. That's an interesting point of view from Bullard. If they really priced all of what he would like the Fed to do. You mentioned something interesting. So you don't think the Fed wants to put us in recession, right? Maybe they don't. If they don't put us into recession, can we agree that they may put

us awfully close? So if they put us awfully close, can we agree that they may put us awfully close? So if they put us awfully close, how can those stocks like small caps do well? You know the economy is going to slow. Yeah, I mean, look, the S&P 500 is not exactly the economy. You know this well, right? So could we get a negative GDP? I don't know. But can the S&P 500 earnings still be up 5% when there's a negative GDP?

Of course it can, because all the businesses have massive pricing power. One thing people don't understand is every year you replace the S&P 500, 6% of the companies, 30 new ads, they grow fast and are expensive, and you take out 30 companies that are terrible. So it's a moving and improving target you're chasing of faster growing businesses. So I kind of think the S&P is the way you can play relative to any bond, really. How long does this statement that Bullard is making right now that we're showing at the bottom of the screen, the economy will grow above trend this year, for how long? Maybe this year, because we got such a head start and such a strong start. It's like, yeah, great, man, where are we going after that? That's what matters most.

I think low to mid single digit earnings growth is a reasonable way to think about the S&P 500. As you know, I'm pretty bearish on economists adding a lot of forecasting value. We're about to find out next month what last year's GDP was, and then they can revise it next September. I think what's more important is corporate earnings.

Look what the banks told you in the last few days since we met. Generally, consumers are in pretty good shape.. Look what the banks told you in the last few days since we met. Generally, consumers are in pretty good shape. Every single one of them told you that. Even JPM, Wells, USB, even today with Synchrony, et cetera. Your not 30-day credit card delinquencies are down month over month. So you're just not seeing the pressure on the consumer. That's the key, Scott, for the thread-the-needle thesis that the consumer holds up.

Of course the consumer has money now, right? They were flush. Wages have obviously been up. But then I look at natural gas and things like that today. Do you see that print? Eight bucks. Eight bucks today. I mean, that's a high since 08.

Yeah, and oil's moving up. Oil's moving up. You can't tell me that there's a de minimis effect of all of that. No, there is. Every Wednesday the government comes out with demand for oil, and you can see it. You haven't seen a lot of demand destruction. Frankly, I don't think there's a choice. I think the demand will be there and it will have to substitute for other stuff, probably more expensive staples. So like for us in the portfolio recommendations, we're underweight expensive staples. They trade at 27, 28 times earnings or over earning and people are

going to downshift to other things because they need to buy oil. Demand for oil just doesn't dissipate. See, this is what I was going to ask you as well about that defensive trade, right? Utilities and staples that have gotten expensive because they've run so much. Is that over? Running its course? Bouts run out of gas? It's a little bit unusual to see the 10-year yield rise and see those kind of names outperform. Typically, they don't do as well. I think utilities probably make a little bit more sense than staples, only because some of them have a natural gas exposure, right?

Coal-fired fleet where gas sets the price. So you could see utilities holding up better than staples and the risk reward's probably better to me. Expensive, staples to me look very expensive, over-earning, have rising input costs they might not be able to pass on. Some of them maybe don't work when oil rises in input. So I'm underweight staples. I'd probably be more cautious. Last point then on tech. I mean, I thought that, you know, rates were going

to stabilize the view that we got from Scott Minard and some others with, yeah, I think they're going to go back into the range where I initially thought they would be, perhaps under 2.5 on the 10-year. And here we go back up and, you know, the NASDAQ's going to have trouble. Whether you believe the whole thesis about long-duration assets being impacted by rates or not, it still is what it is. I agree with that generally. We've been pretty negative on semiconductors. I think they're over-earning.

I'm still negative despite the fact a lot of them are down. I just think the key on semis and the key thing to focus on there is backlog. Remember, somehow you can't make a reservation for sushi without canceling. You know, you pay $25, but I can order $200 million of semis a year from now and just cancel at the last minute with no penalty. So the backlog is the issue there. We're getting production close to consumption, and that's why semis probably are still 10%, 15% overvalued.

Are you having a problem on resi lately? I need to have you hook me up, I up. I know exactly what you're talking about. AP, it's good to see you. Always good. It's Adam Parker joining us right here at Post 9. Let's get to our Twitter question of the day. Which earnings report are you most closely watching this week? Is it Netflix? That is, of course, tomorrow. Snap, Tesla or something else? We want to hear from you. Head to at CNBC Overtime. Please cast your vote. We'll reveal the results at the end of the show. Coming up next, Fundstrat's Tom Lee. He's been bullish on the market, as you know. He told us last week the bottom for the year is in. So why did he respond this way to a tweet that said the shift out of financial assets could turn into a panic move.

Well, I was surprised, which is why I'm going to ask him directly next. And we're continuing to monitor Fed President James Bullard. He is making headlines with the man on your right, our very own Steve Leisman. We'll break in with any of his potentially market moving comments. Futures open in less than two hours. So you got to believe the markets are paying attention. We're back in OT in two. All right, welcome back to Overtime. Now to another headliner, Tom Lee, who says it's no surprise stocks are struggling recently and Uncle Sam is to blame. He joins me now post-night. It's all Uncle Sam's fault, tax day, and then everything's going to be cool? I hope things get better. But yes, this year, April 18th is tax day. It's an extraordinarily big tax hit. We calculated what we estimate Americans owed.

It's about $828 billion, excluding crypto. Crypto is probably another $125 billion in taxes owed. So about a trillion dollars went to Uncle Sam today. But you think literally, like you get today out of the way, and then there's a noticeable and notable impact in the market? Yes. We looked at years where the market was strong. The two weeks into tax day, our markets are weak.

There were a lot of folks caught off guard because they thought they had until October, and of course they don't. They have April 18th. So there was a bit of a frantic push, and hopefully this takes away a indiscriminate selling. OK, we have to discuss this tweet of yours where you agreed with somebody. And honestly, I saw this over the weekend. I was like, what? I was like, what is Tom talking about? So I came and did. I was like, we've got to get Tom Lee on. Gentleman by the name of John Carter tweets

the following. The increasing shift out of financial assets into hard assets will soon turn into a panic move. And you said agree 100. And I'm like, wait a minute. Tom Lee comes on the show and he's bullish and he says the lows are in for the year. And now you agree 100 that there's going to be a panic move out of financial assets. I'll let you explain how that makes sense. Yes. Well, because not all assets are equities. There's a lot of financial assets that are terrible inflation hedges. Americans today own $55 trillion worth of bonds. And they are going to get their quarterly statements. Bonds are down 7%. 25% of all 10-year periods since 1880, bonds have had a negative realized return. We're

probably entering another decade. So there is going to be this, we believe, a panic out of bonds. It'll go into income generating real assets. And a big chunk, we think, will be TINA, which ends up in the stock market. So I don't think people are going to sell stocks to buy real assets, but they probably will sell a lot of bonds. So you're't think people are going to sell stocks to buy real assets, but they probably will sell a lot of bonds. So you're talking specifically about the bond market and money coming out, because it doesn't say that. When I read this, I was like, what? That's right. And I probably intentionally left it a little vague just because, you know, it's the weekend. I was having a little fun. Okay. You knew I was going to call you and be like, what in the world is this?

In all seriousness, you do have people suggesting that there is an alternative, that Tina's no longer Tina, that maybe bonds are an alternative to stocks. Yeah. I mean, it's getting to be very tricky now because we have inflation that is quite elevated. We don't know if it's going to cool. Hopefully, that's our base case that it cools and we know that bonds yields have moved to a level that people might want to actually own some bonds but the reality is if rates do creep up so we have positive real rates meaning you know the ten year goes towards four or five

anybody who owns that fifty five trillion dollar bond complex is going to lose another ten percent so you're talking five trillion of realized losses if people don't rotate out of bonds. What do you make of the fact that interest rates, they don't seem to want to go down right now? That sort of throws a wrench into your bullish thesis. If rates continue to rise, one reason why the stock market seems to be having fits and starts, with all due respect, aside from Uncle Sam wanting his or her money. Yeah, stocks have been tough. We still think February 24th is the low. I think there's a lot of fear in the equity markets towards the Fed. But I think one thing just for the viewers to

be comfortable with is there's already been a huge adjustment in mortgages and auto sales are already rolling over and they're super sensitive to cost of financing. So I think a lot of the work that the Fed wanted to see is being done in the bond market. Ten-year at 4% is still a 25 PE for a bond. So I think stocks can still have multiple expansion if rates move higher from here. But of course, if we stay at 2.8% the rest of the year, I think stocks can rally pretty strong. Bullard, as we mentioned, sitting with Leisman as we speak, having this conversation in which he said Fed tightening is in the market. And that's been your sort of case for a while. Here's the conversation that is going on as we speak. And we've been bringing headlines because Bullard certainly likes to make them. Is it all in the market?

I think that there has been a lot of the work done by the markets on behalf of the Fed. So I think the Fed has been able to get long ends up. This curve is steepened. Cost of financing is up. We're already seeing some demand hit from higher gasoline. So if the Fed was worried about the S&P going up 10 percent a month, it hasn't been. And that's, I think, really helped make the Fed a lot more comfortable with where markets are. And I know Adam just previously was saying, and I kind of agree, I think that there's a chance that the Fed could actually make a dovish pivot towards the end of the year. Man, I just don't get any feeling that anybody else is saying that, but you, Adam Parker, and maybe three other people I could find on a street corner somewhere. I mean, where does

that view come from? Well, I think that over the weekend, actually, J. Morgan Economist had a great study showing the four types of inflationary items, things that are persistent and things that are firming. A lot of these sort of things like auto sales, they're already starting to roll over, and they were huge contributors to CPI. So I think that if inflation on a headline basis is peaking or plateauing, the markets get more comfortable with that. And it takes a lot of the pressure off the Fed as well. But when you look at food and energy, there's just no indication that it's backing off at all. I was talking with Adam and I know you saw yourself today. If I pull it up, natural gas has gotten everybody's

attention. It already had. And now you go over eight dollars. I mean, doesn't that mean something uh yes i mean energy's energy even though it's not directly part of you know pce it is still a works its way into inflation uh it hits people in the in the bottom line though yeah right it affects consumer sentiment they see natural gas they see their bills going up they're worried about where food and energy prices already are that's right and i think think one of the things that we have to see is if it does soften the consumer, it actually, that becomes a feedback loop that actually weakens inflation.

And, but you're right. I mean, the good news is in America, food is, you know, not even 9% of CPI. Unlike, you know, unlike rest of the world where, you know, food is 40% of people's wallet. I appreciate you coming down here and clarifying your tweet because it got me thinking and thus we had to talk. That's Tom Lee of Fundstrat. We'll see you again soon. Up next,

grains and gains. One halftime committee member is making a big bet on the agriculture boom. We'll debate that in today's halftime overtime. And later, we're counting down to Netflix those earnings. The streaming giant reports results tomorrow after the bell. We've got your setup ahead of the numbers when overtime comes right back. I want to welcome you back and show you shares of Twitter, which we did mention had a pretty good day. Most of it happening late in the day. The stock was up 7 percent, almost 8 percent. It's getting a little bit of a boost now on a Wall Street Journal report. You see it at the bottom of your screen.

Apollo is weighing participating in a possible bid there. Of course, the private equity firm is said to have, this is according to the Wall Street Journal, by the way, has said to have held discussions, and I'm reading from the report now, discussions about backing a possible deal could provide Elon Musk or another bidder like private equity firm Toma Bravo with equity or debt to support an offer. It's interesting because there has been some speculation as to whether Mr. Musk would have help from private equity to, in part, possibly finance his deal. And there's been other conversation, too, since that report about Toma Bravo came out late last week that it was interested as well. So we'll continue to follow these latest developments.

But nonetheless, you see Twitter shares in overtime extending the gains that already were reached in the regular session, as we speculate as to where all of this is heading now. It's interesting to note, too, that the stock is still below where Elon Musk had made that offer. It's at $49.20. So stay tuned. It's at forty nine dollars and twenty cents. So stay tuned. If there is any more, we'll certainly bring it to you. It's time for a CNBC News update with Shepard Smith. Hi, Shep.

Hi, Scott. Thanks from the news on CNBC. Here's what's happening. A federal judge this afternoon struck down the CDC's mask mandate for people on public transportation, airplanes, buses, trains and other modes of transportation, calling it unlawful. The decision by a Trump-appointed U.S. District Judge named Catherine Kimball in Tampa. During the White House briefing less than 10 minutes ago, a reporter asked whether the mandate is now off as a result of this ruling. The press secretary

did not answer repeatedly and said the ruling is under review by the Department of Justice. There is a new mandate that projects funded by the $1 trillion bipartisan infrastructure package use materials made in the U.S. The Biden administration issued that requirement just today. It applies to iron, steel, manufactured products and construction materials unless American products are unavailable. And a rare spring nor'easter is forecast to dump up to 10 inches of snow in parts of Pennsylvania and New York. The Great Lakes and Mid-Atlantic are feeling the storm's effects this afternoon. The front moves toward the northeast in New England tonight. Eight million people under winter alerts from West Virginia to Vermont. Tonight, inside the Secret Service and its fight against crypto criminals on the news.

7 Eastern CNBC. Scott, back to you. Big snow mid-April. Man, that's something. Shep, thank you. We'll see you later on tonight. That's Shepard Smith joining us in today's Halftime Overtime. The growing gains in agriculture stocks with a number of big names in that space hitting new highs today. Joe Terranova bought Bungie and Nutrien, and he believes investors can still get in on that trade, even though both stocks hit new highs today. The agriculture trade for me right now, while it looks as if you've got incredibly strong momentum, I think this is a trade that will, without question, go parabolic. There is no SPR. There is no cartel for agriculture prices. Can you get a correction in these names? Yes, you can. Buying opportunity. I am talking about a peak in all of the agriculture names. I don't see that fundamentally,

and that's why I have no problem buying them up here. No problem buying them up here. Well, let's find out what Halftime's Bryn Talkington of Requisite Capital thinks because she just recently got into the ag trade as well. Bryn, it's good to see you. You own ADM, Archer Daniels Midland. It's up only 85%. What do you do now, though? So when I got into the trade, I said I was late to the trade. And because I saw the same technicals and fundamentals that Joe just talked about, I did it actually via options. So the stock was at 85, and I bought an in-the-money one-year option at 85. And so whereas the stock's up 12%, since I bought it, the options up 85%. And I think as investors, you have to realize, you know, soy is up what 30% this year, corn's up 32, wheat's up 65. And so companies like Archer Daniels actually make a spread on top of spot off those higher prices. And so I think we all know that they're going to have really good

earnings. That being said, I think that it's not a secret. And Scott, we all know how much percent of wheat comes out of Ukraine. It's not a secret. And there's actually not that many stocks to play in this space. So my concern is actually it does go parabolic and you're already starting to see the slope of the chart edging upward. So because I did it via options, I'm more prone, you know, over the next month or so to actually exit the trade versus putting on new positions. You always do covered calls anyway to, you know, sort of hedge out your risk. I mean, I'm looking at the gains here year to date. They've been so substantial. ADMs up 43 percent. Bungie, which we just talked about with Joe, 36. Nutrien, 53. CF, huge. Mosaic, you know, it's a double.

You can't fault people who've been in this trade for taking money off the table or taking the money and running, can you? Nope. I mean, I'm a I'm a bird in the hand investor. And I think this year, when you have, you know, the two best performing sectors, energy and utilities, you know, collectively make up less than 7% of the S&P, which to me means really nobody owns them, is that when you can make a good trade like that, I would say, you know, take that and don't try to get greedy. I do think, though, if you do think longer term, if you want to play in the space, I also like to, you know, look at ETFs. And so, you know, VanEck has a really interesting one called Moo, M-O-O, that owns Nutrien, it owns Archer Daniels,

it owns Mosaic. And so if you wanted to have more of a diversified, you could look at, you know, an ETF instead of just trying to bet on one individual name. But hey, I think this year is all about a bird in the hand versus two in the bush. All right. That's Bryn Talkington down in Big Texas, the great state of Texas. Bryn, thank you. We'll talk to you again soon. That's Bryn Talkington again. All right, let's get to Leslie Picker. She's joining us now on the phone for more of those headlines regarding Twitter and possible financing involvement from Apollo. Leslie, what do we know? Hi, Scott. That's exactly correct. I was just talking to a source familiar with the matter. And Apollo's involvement in any kind of Twitter buyout at this

stage would be considering some sort of lending capacity, some financing capacity for a buyout. This is a growing business within private equity, especially within credit portfolios across some of the major private equity firms and other types of private debt. It's just been a growing business in terms of financing these types of deals. This, of course, would be the biggest private equity buyout in quite some time, at least a year. And so it would make sense that Apollo and others that do provide this type of financing outside the traditional realm of the big banks would be looking to get in on some of this financing. So confirmed that this is something they are considering, that they are having conversations about. However, at this point

in time, it does not appear that they would be participating in a private equity buyout style capacity. This is more from a lending, a financing side of the transaction at this point in time. Because of what you just said, I mean, you talk about a big having to write a big check and also against what? It's not like, you know, Twitter is awash in free cash flow doing, you know, fabulous as a business, right? I mean, David Fabers raised sort of the issue this morning and you, I'm sure, did it as well

about the difficulty, if you want to use that word, of private equity actually doing a traditional private equity sort of deal. Exactly. So oftentimes in this type of a situation, you see more of these non-bank lenders come in and use their models in order to, you know, help with the financing, help provide some debt to do more of an LBO. But it probably wouldn't be,

to your point, as much of a debt component as you might see with a company that has much more significant cash flow component. It's interesting, you know, we have been waiting and waiting, right, more questions and answers, Leslie, about what, if any, financing that Elon Musk had arranged or what he was maybe thinking about. And again, we hadn't got many answers. And maybe this is the beginning of the slow trickle is starting to come out with more information. It could be. It could be. It's unclear at this point in time whether the financing that Apollo is considering would be as part of Musk's contingency or as part of a competing bid for Twitter.

It's important to make that clear, that it could be with relation to Musk and his plans, or it could be someone else. If another private equity firm is looking to make a bid, Apollo could come in and help finance that. So there are a lot of moving pieces at this point in time, a lot of questions, as you mentioned, but it's clear that the big money, the big private equity firms are looking to get a piece of it. Yep. Yep. As they usually are. Leslie, thank you. That's Leslie Picker jumping on the phone with the very latest, according to her reporting. I want to give you another live look at St. Louis Fed President James Bullard. He's speaking right now with our very own Steve Leisman. Of course, he's making headlines. We're going to bring you more of them. Instant

reaction as well to his comments is straight ahead. But first, Christina Partsenevelos is tracking the biggest movers in OT. What's on deck, Christina? Well, we've got a lot of movers right now, and that's because of those new earnings reports after the bell, along with details about the impact of a COVID lockdown in China and a drug trial gone bad. That's coming up right after this break.

Let's get a check on some of the biggest movers in the OT. Christina Partsenevelos is here with that. Hi, Christina. Hi, I'm here for the rapid recap. And we're starting with shares of Netgear plunging in the OT after preliminary Q1 earnings. The U.S. consumer Wi-Fi market actually declined in the first quarter for the company and ended roughly flat with 2019 levels. The company also said the supply of components, quote,

to our factories were severely disrupted in March due to covid lockdowns in China, resulting in, quote, meaningful lost opportunity. The company also steeply cut their guidance for net revenue in the first quarter of 2022. The shares are down over 12 percent right now. And then in the opposite direction, shares of J.B. Hunt Transport Services treading higher after posting Q earnings per share and revenue beat. All segments contributed to the year-over-year revenue increase with total freight transactions up 36% in Q1 compared to last year. And then you've got, and you can see the shares up about 1%, shares of Supermicrocomputer jumping over 10% in the OT after posting preliminary earnings that came in above the company's previous guidance. And then last but not least, I just wanted to focus on one company,

the movement today, and that's Nectar Therapeutics. Shares plunged 23 percent today after it halted all trials involving its main cancer drug. The experimental treatment didn't produce the results they were looking for on multiple occasions. Scott. All right, Christina, I appreciate that. That's Christina Partsenevelos. Up next, St. Louis Fed President Bullard is speaking right now. And he just said a doozy. I can't wait to tell you what he just said. I'll bring you the instant reaction to that and analysis with our OT panel next.

Welcome back. St. Louis Fed President Jim Bullard speaking right now with our senior economics reporter, Steve Leisman. There they are. With Bullard already saying just moments ago, the markets have priced in Fed tightening. I think it has. The hawkish shift of the Fed since last November has caused volatility in markets and there has been repricing. And I am very sympathetic to financial markets. At this point, quite a bit has been priced in. We'd be following through and there may be corners of the market that haven't adjusted yet and they would still have to adjust. Let's get some instant reaction from Solus Capital's Dan Greenhouse and Franklin Templeton's Sonal Desai. It's great to see you both. Well, he said he's

bullarded, Sonal. He said he's sympathetic to see you both. Well, he said he's bulleted, Sonal. He said he's sympathetic to markets. He sure has a funny way of showing that because he also said he wouldn't rule out 75 basis points, but it's not his base case. Sonal? I don't think when he said markets have priced in, I think what he said was markets have largely priced in. They've priced in 50 basis points for each of the next three meetings. But Bullard has also gone on record saying he would be comfortable with the Fed funds rate at 325, 350 by the end of this year. And both actually are higher than any of the dot plots, certainly the median dot plots we had last time. So I think that the market actually hasn't fully priced in yet what the Fed will do this year. Interesting. Greenhouse, what

do you what do you think? And also, I mean, this idea, look, he can say whatever he wants. He usually does. Right. And it tends to be more hyperbolic, if you will, than what, you know, the conventional thought is on the Fed. Seventy five basis points. That's not going to happen, right? Yeah. I mean, not right now. But and to be clear about Bullard 75 basis points, that's not going to happen, right? Yeah, I mean, not right now. And to be clear about Bullard, for years, he's often been at the leading edge of Fed thought. So while he may not be at the center right now, perhaps he's indicative of some thinking that's going on behind the scenes. And no, I don't think 75 basis points is the likely outcome. But clearly, as you've been talking about all day with what's going on with commodity prices and the war in the Ukraine, perhaps putting some upward pressure over the next, call it six months, on commodities and a number of components of inflation, perhaps they

might feel like they have to go 75 basis points at one of the next couple of meetings. They've got 50 basically, to Sonal's point, already priced in. Not that 75 isn't a big departure from that, but it's not so big from when the market already is. But it's more speaking from your point of view, Sonal, right? I mean, you don't think the Fed has been hawkish enough. I don't actually, because, you know, everyone talks about the Fed's hawkish pivot, but I would note that the Fed finally acknowledged that inflation was in transitory in December and then spent the next three months expanding its balance sheet. So, it wasn't really putting its money where its mouth was at that time. So, in a sense, January, February, March just made the Fed's job that

much harder because they were expanding their balance sheet over this entire period. I think that the part which I find interesting is if I looked at the previous dot plots, essentially inflation comes down and you don't get real rates to positive territory until we're really looking at a 20 basis point positive real rate towards the end of next year. So essentially, inflation needs to come down by itself in that scenario. I don't think that's very likely. So I think the Fed, if anything, is going to revise its stock plots, and we're going to get more rate hikes than are currently priced in by the market.

Oh, that's interesting. Dan, last word goes to you, because as Adam Parker and Tom Lee both said, they're expecting a dovish pivot from the Fed. The exact opposite of what Sonal says could be the case. Yeah, listen, I mean, we are somewhere around now presumably going to get the peak in inflation rates. And if it starts coming down over the course of the year, then they might have some room to sort of take their foot off the gas pedal. But I would just remind people that what's priced in now doesn't mean that that's what's actually going to happen. And if you look back in the last cycle in the mid-2000s, at this point at the beginning, the market had priced in about 150, maybe 175 basis points of hikes.

They ended up doing 425. So the idea that what they're going to do over the next couple of months is the sum total of what's going to actually happen is something I disagree with, even if they don't have to go as aggressively as quickly as the market is currently suggesting. All right, we'll leave it there. I'll talk to you both soon. That's Dan Greenhouse, joining us. Coming up next in overtime, serious subscriber concerns weighing on Netflix. The stock is down 12% in just the past month. So what can you expect when the streaming giant reports its earnings tomorrow in the OT?

We'll set you up next. Do not forget to weigh in on our Twitter question of OT. We want to know which earnings report are you most closely watching this week. Is it Netflix tomorrow, Snap, Tesla or something else? You can vote. Head to at CNBC overtime and cast that vote. We'll give you the results when we come back. Well, I can't say I'm surprised, but the results of our Twitter question, we asked which earnings report are you most closely watching this week?

And the majority of you said big shock tesla 57 although maybe it is a surprise because netflix does report tomorrow after the bell cnbc contributor alex kantowitz is back with us to tell us what to expect i mean i don't know is the bar high or low the stock has been almost cut in half. And there's real questions about subscriber growth. It's a great question. And I think that it for this earnings in particular doesn't really matter where the bar is

you know people are expecting a couple million new net subscribers. I think there's a fundamental question that we're asking about Netflix right now. And that is do you want to value it as a high growth company or do you want to value

it as an entertainment company. That has to to use technology i think the market is finally settling on the fact that this is not a tech platform it's an entertainment company using technology to reach people and that's why i think you know netflix stock is down 43 percent this year that makes sense to me it's about time that we started to see it um in a rational lens and i think the market is finally getting there. And so whether they add two million subscribers, five, seven million subscribers, I don't think it really makes a big difference. It's basically about where you view the fundamentals of this company. And I think the market is finally getting it right.

So the days of a really big multiple then are over. That's what you're saying to me. Yeah. You know, I think that we went through a period, especially during the pandemic, where the market was out of whack with the fundamentals of what companies were bringing in. And certainly was the case for Netflix. I mean, Netflix is case in point, a true story stock during the pandemic where investors said, all right, we're going to be stuck at home forever. Netflix makes a lot of sense to pour a lot of money into. And they did. And they inflated the valuation way beyond where it should have been. And I think it's finally coming back down to earth. You know, now it's acting like a company that's actually trying to maximize profit growth by raising

prices, by starting to charge you if you're using it in multiple households or sharing passwords. This is not the actions of a growth company. And so you don't really need the valuation of a growth company to be attached to Netflix. If it's going to start to try to maximize profit, the market should start looking at it like that. And I think that's what's happening. I think that's largely good. A market attached to fundamentals of companies is a much better one than one that's unhinged. I have about 30 seconds left, and I wonder what the churn is going to be.

You know, there was that story over the weekend about subscribers of streaming services in the UK, for example, a large number of them cutting their services on the backside as we come out of the pandemic. I'm wondering what we what we hear with this one and quick, if you could. Makes a ton of sense. Everyone's starting to cut back. We're not stuck inside all the time anymore. And then, of course, there's the Russia thing. Netflix is out of Russia. There's one million subscribers gone there. So totally in line. It makes a ton of sense. People are pulling back. Talk to you soon. That's Alex Kantrowitz of Big Tech Knowledge joining us. By the way, since the second quarter of 18, Netflix has traded down 13 of the 15 earnings prints. So we'll be watching closely again right here in overtime tomorrow.

The report and the instant reaction that does it for us. See you tomorrow.