Closing Bell - Closing Bell Overtime: Weighing Today’s Bounce 9/7/22

Episode Date: September 7, 2022

Did the Fed’s Lael Brainard just open the door – ever so slightly – for an end to the rate hikes and the beginning of a bigger rally? Bryn Talkington of Requisite Capital gives her take. Plus, will Apple’s big product event get the stock moving higher in the months ahead? All-star panel of Jason Snipe from Odyssey Capital and Alex Kantrowitz of Big Technology break down what they’re seeing for the tech giant. And, market expert Mike Santoli digs in on today’s rally in his Last Word.

All right, Sarah, thank you very much. Welcome, everybody, to Overtime. I'm Scott Wapner. You just heard the bells. We're just getting started. In just a few minutes, we will discuss whether today's big Apple event will get that stock moving higher in the months ahead, despite the choppy and unsettled markets, of course. We begin, though, with our talk of the tape. Today's bounce in stocks and whether one very important Fed talker just opened the door ever so slightly for an end to the rate hikes and the beginning of a bigger rally. Let's ask Bryn Talkington, requisite capital managing partner, a CNBC contributor, member of the Investment Committee. It's good to see you. It was Lael Brainard. She was hawkish.

No doubt about that until she said you've got to be careful not to overdo it on the tightening. It happened during halftime. Stocks took a little bump higher. The market seized on it. What do you make of that? Last time we listened to the rhetoric enter the meetings, that didn't end so well for the market. So I'm still going to listen to Powell. I think she was just, you know, being honest about what the data points that they're looking at. But I think it's really clear they're going to continue to raise rates because she also said it's going to take a few months until we know the real data. And so a few months from now takes us to the end of the year. So I wouldn't get too excited about her sprinkling in any type of pivot.

I think they're going to stay hawkish. There is a belief, though, that they're not going to have to do as much as they say now. Their words are doing somewhat of the trick. And inflation lately has been cooperating. And if it continues to go in the right direction, they might not have to be as hawkish as the market fears. Well, so that would be great. But remember, you know, back in the 70s and at the last meeting, Powell was talking about Volcker. But it was Arthur Burns, who was the Fed chairman from 71 to 78, that inflation came down,

they cut rates, and then actually inflation started coming back up. So it would be wonderful that happened. I'm just not sure that the Fed is going to let up on that hawkish rhetoric until sometime early next year. The other idea is that the hikes are all priced in, right? That's the view from Brian Belsky, for example, from BMO, who was with us on the Halftime Report today. I want you to listen to what he had to say. We can chat on the other side. Stop wallowing in the negativity. We know that inflation's here.

We know that it's sticky, but it's beginning. We're starting to see signs that it's beginning to roll over. And I'm not calling for this big pivot by the Fed. The Fed, I'm sorry, does need to be aggressive when we know that. Right. We do know it. Yep. Yep. And so I think, you know, Brian brought up some good points. And remember, as an investor, every single day the market is recalibrating and taking in that new information.

So I'm totally open that the market has clearly priced in everything that you and I talk about every week. What I'm not sure that the market's priced in, and where I disagree with Brian, is that I don't see how we get multiple expansion over the next three months to take us back to 4,800. That just seems to me too big of a leap right now, where you had the Fed hikish, and then all of a sudden hawkish and then you get multiple expansion going in the next three months just because we get inflation starting to come down. That doesn't that doesn't correlate in my mind as a high probability. Yeah, I mean, he's got almost 19 times two hundred and forty five dollars on earnings. Right. So he had taken his earnings projection down, albeit ever so slightly, not that much, and certainly not as much as others expect. But he might be right.

And we just don't know yet. Well, yeah. Yeah. I mean, we'll find out. But here's the question that I have for the strategist. And I think Brian did such a great job. My question is, what does the U. the US economy actually look like after the Fed is done? And that's where I'm still in the camp that we're late stage cycle, because the Fed will have done one of the most aggressive Fed tightenings.

You will still have theoretically quantitative tightening unless the Fed does pivot. And so I just feel like we're gonna have low growth and we're gonna have a much, much higher rates, exponentially higher than they were the past two years. And I think multiples should reflect that. And so that's where I just feel like we're going to be much more chugging along over the next six to 12 months and not racing back to these all time highs. I just don't feel like that environment and those ingredients are here for us to have that type of forty eight hundred market in the next by December 31st. Are you believing then? I mean, forget forty eight hundred. We're at thirty nine eighty.

Let's call it that. Is this nothing more than an oversold bounce today or is there something a little bit more to it? Right. We talked about energy today. Right. Oil goes under eighty two. And we're going to talk a little bit more about that in just a minute. But oversold bounce, nothing more? I'm going to say yes for right now. It's definitely oversold. I saw earlier the put buying last week was just huge, huge institutional put buying, you know, putting in hedges. And so I think you see us bounce off that 3,900 technicals. I just think we're in this process where it's going to take time. And that's why like in our portfolios, you know, I sound like a broken record. We have so many covered calls. That's definitely like our biggest single position, just having, taking advantage of that volatility

because there are going to be years, Scott, when the markets are down, we can't go up every year. And we've only had one negative year in the last 10 years, which was 2018. This to me seems like a year that could be down. And that's okay, by the way. That's okay. And so I just think I want to manage our clients' expectations about what they should and shouldn't expect. And I think expecting a 45, 4800 by the end of the year is a really tough build, a tough sled to hoe over the next couple of months. If it happens, great. I just don't think it's a high probability. You're still telling clients that a retest of the lows is is possible, if not likely. Jonathan Krinsky today, BTIG, this bear market, he says, quote, looks to have one more serious surprise before it's all over.

When an oversold market can't bounce, it's typically a sign to step aside and wait for a bigger washout. Now, you obviously did get a bounce today, but he says, and I'm quoting again, ultimately, the unrelenting upward pressure on rates and the dollar suggests this bear market likely has one more surprise and the June lows need to be back in the conversation. Are they in your conversations? So the way we're thinking about it, first of all, you know, this is Jonathan's profession. He spends all day looking at the technicals. And so I read the report earlier. You have to take it to heart because obviously he does a really nice job. What we're doing in the conversations we're having is that we are

positioned because we have a lot of calls, we're much more defensive, that we're going to ride this through. And we do have a lot of clients that have cash and we've been dollar cost averaging. And bear markets are a wonderful time to be accumulating great companies and great strategies. And that's what you have to do. So I don't have to make a call of whether we're going to go to $3,600 because I'm not going to sit in cash and wait. Because once again, if you sit and wait for that bell to ring, I can almost guarantee you'll get it wrong.

Because if we go to $3,600, it's going to be for a reason. And everyone's going to be panicking and then saying, oh, do we make lower lows? And so I'm going to invest through it and do what I'm supposed to do and continue to dollar cost average for clients that have that cash into this type of tape. I do want to talk about what has been one of your favorite trades. It's energy. Mark Fisher, the famed oil trader, calling into halftime today with some pretty provocative thoughts on where he thinks both oil and natural gas are going and what investors should do about it. Listen. In anticipation of the winter, as a trader, you couldn't ask for a better setup because now the risk reward of entering into the energy patch has just gotten 10 times better, right? Instead

of having to buy, instead of buying nat gas at $9, you're going to be able to buy nat gas at, you know, sub eight, maybe mil sevens, or maybe even lower. Crude oil, instead of having to pay 90, 95, 100 100 you're going to be able to you know the risk reward that lines up much better in anticipation of the winter which is not going away i think this is a next week it's going to present a pretty good buying opportunity i mean what it was a couple weeks ago you thought energy was getting toppy and you made some moves accordingly what do you make of what fish had to say here what you think it ultimately means for stocks and energy stocks in general?

So so so so Mark's trading the commodity directly. Right. And so obviously you've seen a really big move in that move in the commodity. The underlying names today, like Devin was down, I thought I think at the close around one and a half. So nearly not as much as the commodity. But all year long, this has been a buy the dip sector. It's still the best performing sector year to date. It's outperformed everything. And so I think we all know the fundamentals. But Scott, what I'm thinking about right now is there's a lot of tourist capital in this space that have been in energy not that long.

And they didn't sell at the June highs. And so I think you're going to see sellers continue to come into the market and people taking profits when they didn't take profits a couple of months ago. That being said, if you're a value investor or you're looking to the value sectors, without a doubt, energy is the cheapest sector of all of the sectors by a large margin. It has an 8 PE over the next 12 months. It has a free cash flow yield of 13 percent. And so you're going to get this financial supply and demand mismatch, which right now there's no real fundamental reason to sell off crude. Right. There's no real fundamental reason. But that financial speculant is rampant in this sector. And so I think if you want to earn those returns in the sector, you're going to have to sit through it or sell calls because it's going to remain volatile.

I mean, I can think of a fundamental reason to sell crude. And if you think we're going into a recession, obviously you would think that demand would go way down and that that would be a fundamental reason to do that. But let's broaden the conversation if we could. Let's bring in Keith Lerner of Truist, a CNBC contributor, Jason Snipe of Odyssey Capital Advisors. Good to see both of you. Keith, where from here? What do you make of what happened today? A pretty good bounce, maybe a tick up on those Brainerd comments, even though they were hawkish, a little line of dovishness mixed within a hawk. What do we take from that? Well, first, Scott, great to be with you. Listen, we think this short-term rally has a bit further to go. If you recall, a couple of weeks ago in early August,

we were saying, you know, to reduce the trim equities in that 4,200 to 4,300 level. And then stocks came down about 9% in the straight line. Our indicators suggest we're the most oversold since the mid-June lows, about 80% of stocks in the S&P oversold. So we put a note out late last week saying that we think it's been overdone one side. We think there's more room for this to go. But it is in the context of a choppy range. We just think we got to the lower end of this range. We think the upside is probably still capped, you know, maximum 42 to 4,300. I think we have pretty good support here around 3,900. And again, since we were so oversold, I think we have a little bit more room to go on the upside, at least here short term, since so many folks were caught off sides again more recently than today. Jason Snipe, what about

this notion from Belsky, right? Stop wallowing in the negativity, he said, as we played earlier. We know inflation's here. We know what the Fed is going to do, but maybe inflation is starting to roll over and roll over hard. It's going to show up next week and that's going to enable the Fed to not to not have to do what some people think it might. Yes, Scott, I think it's an interesting point. And obviously the Super Bowl for us as investors is is CPI and PPI next week. But I would say it's a series of Super Bowls, right? We need to see an overall trend, 9.1 to 8.5. That's just one bullet point. We need several numbers like this and moving down.

And again, our target is 2%. It's gonna take some time to get there. And you know, I'm not gonna say it's wishful thinking on Belsky's front and just saying that it's rolling over. It's going to roll out fast. I think it's all about the velocity of the rollover. How long is this going to take? The Fed's still got to still got to do the work and do what they've been and talk the talk that they've been talking and continue to move forward with their with their policy. But I but I think rates I think rates are looking in a good direction or heading in the right direction. And hopefully we'll see a series of lower prints going forward.

I'm taking a look at my fact set right now, noticing that GameStop has reported earnings. Remember GameStop? Christina Partsenevelis does. She has the numbers for us as we watch that stock move higher in overtime. Christina? Well, Scott, I can't make a comparison to estimates because most analysts have dropped coverage of this company. But we are seeing it post adjusted loss of 35 cents a share on revenue of $1.14 billion. The company also just announcing right now that it's forming a partnership with FTX.

That is a currency crypto exchange. You may know the CEO. That would be Sam Bankman-Fried. This is the latest news coming from it. Keep in mind, the report's really short, but just details. And to remind our viewers just about the company, they've been suffering through a slowdown in gaming. There's been a cash burn because they're spending a lot of money on their NFT platform. They've had employee turnaround.

Just in July, they fired their CFO, laid off a bunch of corporate employees. And then lastly, they have to deal with still some hardware constraints. And you have a company where they had a 4-for-1 stock split just in July, and the stock is still down close today, what, down 35% year-to-date, and 21% of the float is shorted. So it seems like the Reddit apes still have some ways to go, but the stock is moving higher. Again, adjusted loss of $0.35 a share, and it's partnership with FTX. Scott?

Memers rejoice. The stock's up near 12%. We'll see where it goes from here. Christina, thank you. That's Christina Partsenevelos with the GameStop earnings there. Back to our conversation. I mean, Jason, you have been cautious. Is there any reason not to be today? So I think, you know, if I'm reflecting on today's little bounce, obviously, NASDAQ was down 7 percent. Well, over the seven straight days, I should say, crude was down 5 percent. And we had Hawke's slightly dovish comments, like you said earlier from Brainerd. And again, you know, when I think about the dovish point, I think it's more about, hey, look, the statement was we still

have to move forward. We still got to move forward from a policy perspective, but we don't want to go too hard. And we are conscious of that. And I think that was a reflection of some of the balance that we saw. So I think it's a bit of oversold conditions, a little bit of a pullback and crude and also yields pulling back because obviously they've been running since Powell's speech last week. So I think that was a part of the reflection on what we saw today in terms of returns and the markets moving the way they did. Pardon me, Jason. Forgive me for stepping on your toes there. Bryn, NASDAQ, this bounce back today after a run of bad news day after day and seven straight.

As a matter of fact, What do we do with that? Well, if you're long, if you're long the keys, you ride it for right now. But I still think that these stocks are too expensive. And so I think they're going to be trading around, sloshing around. So if you traded this, I think this bounce like Joe obviously is in the trade. He can trade this. I'm sure once it, you know, 12000 was a line in the sand. But I would trade this trade, this position right here. Keith, is tech too expensive, as Bryn says? Yeah, well, I mean, we're a neutral tech. But listen, Scott, the reason why you buy tech is when the economy is slowing down, the earnings momentum is stronger than the market.

That's not happening right now. At a time, you're still trading at about a 25% premium to the overall S&P. So we just don't think it's leadership. I think people look to tech as leadership because it was leadership the last decade. I just don't think it's leadership today and less likely to be leadership tomorrow. So we would still stay overall somewhat more defensive. I mean, look at utilities. In a day, the market's up 400 points. What's breaking out to a new relative high utilities health care is doing well staples are doing well also i think tech can rally more again with this overall market but i don't think it's leadership and you know i would use that bounce to trim if you're overweight let's round it out jason with energy right we played you the fisher sound from earlier said not quite the

opportunity to buy the actual commodity itself, either oil or natural gas yet. But Bryn says the stocks are still among the cheapest in the market. You agree? I agree 100 percent. I think the supply demand narrative is very much intact, you know, and if I look forward at their earnings growth and their earnings for this season has come all from energy. I mean, primarily, I mean, it was a really nice season for them. Capital discipline that they've displayed throughout the pandemic, a lot of free cash flow in a lot of these names. I like energy. I think it's I think there's still some tailwinds, secular tailwinds going forward for a lot of these names. I appreciate it, Bryn. Thank you, Keith, as well. Talk to both of you again soon. Jason's going to stick with us for a moment. Let's get to our Twitter question of the day.

Now, we want to know what level will oil hit first, 60 bucks or 100 bucks? You can head to at CNBC Overtime on Twitter. Cast your vote. We'll share the results coming up later on in our show. Up next, Apple's big event taking center stage this afternoon. So what does today's slew of announcements actually mean for you, the investor? We'll discuss with an all-star panel next. We're live today. Overtime is right back. Welcome back.

Apple hosting its big fall event today. Highlights including iPhone 14, best kept secret. New AirPod Pros, three new types of Apple Watches. The stock up slightly today. It has underperforming broader technology, though. Back with us, as I said, Jason Snipe, Odyssey Capital Advisors Principal and Chief Investment Officer, shareholder, of course, and also with us, Alex Kantrowitz, big technology founder, both CNBC contributors.

So what's your takeaway, first and foremost, Alex? Well, this was typical Apple that we've seen. You know, iPhone 14 launch looks a lot like the iPhone 13 launch, which looked a lot like the iPhone 12 launch. You hold both these phones or all three of these phones in your hand, you probably can't tell much of a difference. And maybe that's a testament to Apple. CoolCom collected shipping. They have the products that aren't going to, you know, really change your mind about what the iPhone is. But through doing that, they were able to increase iPhone sales last year, 35 percent to one hundred and ninety one billion. And for Apple, you have to kind of say, all right, that's that's pretty good.

Not bad for a day's worth of business. You paint it as no big surprise. However, many are shocked at the fact they didn't raise the price of the iPhone. Well, I think that's a move they had to make because in terms of not raising the phone now, we know that they're doing a good job in terms of supply chain. But if you're thinking about Apple trying to maintain or at least not, you know, lose the momentum that they had with the sales in 2021, remember up 35 percent in terms of revenue. And you're taking that, you're bringing it into this moment we have now. You have high inflation, you have raising interest

rates. You have people saying, can I hold on to the iPhone 10 that I have or the iPhone 12 or 13 and not upgrade to the 14? Apple needed to do something to counter that. That's why I think keeping the price the way that it is, is Apple's move to say, OK, we're going to still try to get the same amount of sales, even though the macro environment is much more challenging. Now, the question is whether that will work or not. And I think that's an unsettled question. What about that, Jason? This idea that most people expected a bump in price. They don't do it. It's being described in some media outlets as a shocker. Was it to you? It is in some respects, but I think it just shows Apple's just tremendous pulse on the consumer. I think that was so important. Again, my colleague just mentioned the macro environment is very different than it was potentially last year and several years ago.

So I think this is just a good read through them, understanding what the macro environment is. And I think the big story for Apple is always going to be about the demand. What is the demand for the products and services? The iPhone is obviously the bellwether product. Wearables have dropped some, the Mac supply chain issues. So I think this is a good move by them. We'll see in the next coming quarter, you know, how it plays out. But I think this is a good move. Any part of this, Alex, that says Apple doesn't have as much pricing power as maybe we thought they did? Other companies are raising prices left and right. Why not Apple? Well, again, I would go back to the state of the

economy right now and you look and you have to take that in connection with the products that they're shipping and again I'll say the iPhone 14 is it gonna look that much different from the 13 and is 13 looking that much different from the 12 I'm gonna say no and I think anyone that's watching this company understands that the products you know though they get better don't change very much the way that they used to when they were single digit. I remember being back at the Apple events in Cupertino when you were going for the eight or the, you know, going to the 10. Those were big leaps. Right now, we're not seeing the big leaps. And if that's the case, consumers are going to be tempted to hang on to the older models. And so, you know, whether it comes to

pricing power or not, I think Apple needed to do something to say, listen, this 14 is going to look a lot like your 12, but we still want you to upgrade. And so we're not going to raise the price. We're going to tempt you a little bit more. Some new features, a price that you might find more affordable if you're looking at places where you're trying to not spend that much money. Maybe we make the decision a little bit easier for you. And that's what I think we saw today. Jason Stipe, Dan Ives, obviously bullish Apple. He'll remind you of that anytime you talk to him about it, obviously. He says this kicks off another strong product cycle despite the macro. It does speak to the tremendously strong installed base that Apple

does have. The meaning for the stock going forward, though, is what? Yeah, it's a great question. I mean, the other thing that I was thinking about is just the FX headwinds. I mean, we saw a 300 basis point headwind in this particular quarter. The next quarter going forward is potentially a 600 base, so double the size. We're seeing the dollar move like it's been. I mean, Apple is a largely multinational company. I mean, 58 percent of their business is overseas. So I think it's going to have to it has to do with products. It's going to have to do with demand, like I mentioned earlier, you know, and just having a good pulse of the consumer. That's that's really what what's going to move Apple further from here. So, I mean, that's how that's my read through and how I'm evaluating the name.

But what about what about the importance right now to the overall market? Right. We feel like we're kind of teetering. We're not exactly sure which direction we're going. But I can tell you this, if Apple starts moving lower towards 140, where our Twitter poll voters said they thought it was going a majority of did yesterday. I could tell you where the overall market is going to go. A hundred percent. I mean, Apple had a tremendous run throughout this summer. It's pulled back recently. It's down about 10 or 12 percent over the last couple of weeks. So we'll see how the holiday season plays out. I think that's going to be important to the name. But as you mentioned, I mean, it's 7 percent of the S&P. It's a major bellwether stock, and it's a good read-through on the

consumer. But I think with the demand, with consumer demand potentially faltering some, you know, and the market starting to slow, I could easily see it going back to 140 before it goes to 170. I think that's just my personal opinion on where I think it goes from here. Alex, last word to you. We spend so much time talking about the iPhone. We don't do justice to the watch announcement, nor the AirPod Pro announcement. Should we take something away from that? Well, I view the watch and the AirPod Pros or the AirPods in general as accessories to the iPhone. Without the iPhone, is there the watch? Is there the AirPod? Now, we understand that these, you know, categories, these product categories can stack up in the Fortune 500, you know, quite well on their own. But they are, at the end of the day, products you use with the iPhone. There's been a lot of, you know, talk about this new,

you know, nice watch, the Ultra Watch that Apple's, you know, releasing. But, you know, that's going after Garminmin and Garmin is only a $17 billion market cap. And I say only, you can say only when that's compared to the $2.5 trillion, you know, that Apple has. And I don't think that makes a big difference at the end of the day. So I think the key here is focus on iPhone. Let's look at what happens, you know, when this gets out into the market and see if we see the same growth that we saw last year. If we do, then Apple's in great shape. If we don't, then we start to look into some of the darker predictions that we were discussing. All right, Alex, thank you.

Always appreciate your time. Jason, thanks for sticking around for us. A little OT in OT, talking about Apple. Up next, a market bearer says he could still find some opportunity in the tech space. He'll tell us exactly where after this break. Can today's bounce be trusted? My next guest says the overall market is heading lower this year, but there are still opportunities. Joining me now, Eduardo Costa. He's the founder of Calixto Global Investors. Good to see you again. Talk to me about tech specifically, though, because that's where I think a lot of people's focus is right now, given the losing streak that we had, the little bit of a bounce today, if it means anything of a reversal for this space.

Look, I think one of the thank you so much for having me, by the way, as always. I think one of the issues that we face is we're stock pickers. We're talking to companies on a daily basis. And what we're hearing is one company after another where fundamentals are deteriorating. I mean, if you take the software sector as an example, we're seeing slowing decision cycles and slowing IT spend. And that's particularly the case for companies with large European businesses. I mean, just in the last week, you've had MongoDB, Okta, AI, Palantir, UiPath, all either missing, guiding down, or both. And so the forward prospects for growth in a number of these sectors are not good.

The same is true in a lot of pockets of semiconductors. A lot of these companies have taken very significant pricing because of all the shortages that have taken place, given the impacts of the pandemic and are at peak margins with inventories also very high and the demand picture pulled back substantially. I think the issue is the ability to rally around companies where the fundamentals have bottomed because it seems like numbers in general in tech are headed more downward than they are upward. Okay, so given that's your view, and I think it sets up what I wanted to do during our conversation today,

I want you to listen to what Glenn Kacher told me a couple of weeks ago. He's a noted tech investor from out on the West Coast, from Light Street, owns a lot of the enterprise software names that were in the crosshairs. A lot of them have come down, as you said, quite a bit. But here's what he told me, and I want your reaction to it on the other side. This seems like an incredible buying opportunity for our industry. And so we're incredibly positive and we like the portfolio that we have built to come out and take more positions in this sector,

that we're in the right stocks that are going to benefit greatest from that re-rating. Why doesn't that make sense? So I think one of the issues has to do with valuation. The other has to do with numbers. If you look at multiples that software stocks have traded at in terms of EB to revenue, you saw in 2017 stocks in the highest growth bucket, so the company's growing in excess of 30 percent, trading at, call it, six to seven times revenue. That peaked last October, November, up at 40 times revenue. And we're back down a lot, right? So we're down, call it, 10 to 40 times revenue. And we're back down to down a lot. Right. So we're down, call it

10 to 12 times revenue. But, you know, who's to say that we're not going back to 2017? There are macroeconomic forces at play here that are impacting demand. I mean, you guys have talked a lot about that, so I won't get into it. But as demand goes down, companies are going to be missing numbers, and it's very difficult for multiples to be expanding in an environment where companies are missing numbers. All that being said, we do have a number of investments in the software sector that we're very excited about. We currently have a significant position in 5.9, which I believe we talked about on your show. We also have a sizable position that we've been building recently in a company called Bill.com, which is one of the leaders in the payments space. And it's an accounting software, bill pay, invoicing.

There's a huge pocket of credit card companies out there that are servicing small and medium-sized businesses. And what these guys are doing is they're coming in, they're replacing the credit card, and they're augmenting that with bill pay and with invoicing and centralizing accounting for small businesses. And they're taking share like crazy. I mean, they've got 150,000 customers right now. They're growing their transaction value over 50 percent, their revenue over 100 percent. And we like that one a lot. It's down significantly year to date and from its pre-pandemic peak. You're making what sound like highly rational explanations as to why you don't like certain parts of the market.

But now I want you to make one on why you like some of these China tech stocks, because for many, it's irrational. It's not the right time. And it may never be time again. So why do you have a big position, still your top in ZTO? Why do you still have a big position in Alibaba? So I've been investing in China since 2000, and it is definitely a different environment, which started in 2018, and it really deteriorated with the regulatory crackdowns that started to take place last year and into this year. And we're not anywhere near as heavily exposed as we have been at other points in the past. What we're simply out there saying is, look, we've started to dip our toe back in the water here.

And if you look, most of the folks you will have on the show are saying it's uninvestable, the positioning is totally swung in one direction with no one owning these stocks, and the multiples are super compressed. At the same time, it would appear that President Xi is going to get reelected next month. And from the folks that we talked to, we think that there's a very high probability and likelihood that you're going to see this zero COVID policy start to get repealed. And that's going to serve as an economic tailwind. I mean, what other economy do you have out there where interest rates are being cut rather than raised as they are in the rest of

the world and where we were already been open for a while? They've been in lockdowns. We think that as we get into next year, we're going to see reopening. There's going to be economic tailwinds and there's no one left to sell these stocks. ZTO is our biggest position. They've got almost 25 percent market share in the parcel delivery space. We don't have a big position in BABA, but we have started to build it. And I think it's very, very compelling at these levels with the fundamentals seemingly starting to turn in the right direction. Love your comment. A high probability that she is going to get reelected, you think? Not leaving that one to chance. We'll talk to you soon.

It's good to spend time with you again. That's Eduardo Costa joining us here in overtime. Time for a CNBC News update with Shepard Smith. Hey, Shep. Isn't she reelected? Hi, Scott. Thanks. From the news on CNBC, here's what's happening. More shelling today near Europe's largest nuclear plant. Russia and Ukraine blaming each other for what's happening in Zaporizhia. Just yesterday, the U.N.'s atomic watchdog said a safe zone is needed around that plant to prevent a catastrophe. The Ukrainian government urging everybody who lives in and around that area to get out, evacuate for their own safety. Steve Bannon expected to turn himself in tomorrow to face indictment on state fraud charges in New York.

No comment from the Manhattan D.A. office. It reportedly opened an investigation last year into Bannon's role in a charity that was supposed to raise funds for a U.S.-Mexico border wall. The senior advisor in the Trump White House pardoned by the former president in a similar federal fraud case. In a statement to NBC News, Bannon called the pending indictment phony charges and politically motivated. And New York City dropping its mask mandate on public transportation effective immediately. The governor, Kathy Hochul, making the announcement today,

saying the city's in a much better place as cases and hospitalizations are on the decline. Tonight with Jim Cramer away, we'll be with you an hour earlier than usual for in-depth analysis on all the big stories of the day, including the Mar-a-Lago documents case, a full breakdown of everything Apple unveiled today, and updates on the war, possible lawsuits surrounding student loans. Even Jay Leno joins us live to talk about cars on the news tonight right after Fast Money, 6 Eastern, CNBC. Scott, back to you. I look forward to that extra hour. Shep, thank you. That's Shepard Smith. Up next, getting back into tech. One halftime trader making a bet

on the Q's. We're going to debate that in today's Halftime Overtime. And don't forget, you can catch us on the go by following the Closing Bell podcast on your favorite podcast app. OT is right back. In today's halftime overtime, queuing up. Tech stocks rallying today to snap the Nasdaq's longest daily losing streak since 2016. And Joe Terranova is getting in on that action again. He bought back into the Q's ETF this morning. He's keeping a tight stop, though, on that trade. Listen. I'm more than willing to accept that risk to reward scenario. I'm reacting to what I see in

the market. It's a high probability trade. If I'm wrong, which, OK, most likely I will be. I'm going to lose a little bit. All right. Let's bring in Shannon Sikosha of SVB Private. It's good to see you to react to this move by Joe, which took me a little by surprise. You own the cues. Is now the time to get in? So I don't disagree with Joe. If you don't have significant large cap tech holding, Scott. This isn't the worst time. I do agree with him that I think there is a bit of asymmetry in what's going to happen over the next couple of weeks in terms of these growth stocks. But I would say it could be very short term.

I mean, we could see a little bit of this unwind right after the Fed meeting. And so, you know, from my perspective, I would be looking out a little bit longer term. If you're looking to hold them for more than a year, I would say there's probably a good entry point here over the next couple of months in this particular trade. If you are looking to be really cute with it, I would say this is probably pretty tactical over the next five, seven, 10 days. And you could see a little bit of pain outside of on the back of that Fed meeting. But but, you know, we have a lot of this exposure, a lot of concerns about enterprise spending coming into the second half of the year, which really haven't, you know, materialized whatsoever. We're seeing a lot of cloud spend

and there's a lot of cloud exposure in the queues. I mean, all of this would imply, of course, that you think that the market, if you have a little bit of a window between now and the Fed meeting, that this one day bounce could materialize into something a little bit more than that. There could be a few more days here, Scott. I mean, I continue to think that the market, despite the pain that we felt over the last couple of weeks, is looking for the Fed to potentially start to pivot. We had, frankly, a really good jobs report in terms of economic data. We could see another slowing CPI report. PMI, both services and manufacturing, both showed prices paid were down meaningfully. And so I think the inflation data is going to be good coming into this Fed meeting. And so you could see a little bit of a bounce here for these growth names, particularly within the technology space over the next week or so. Take away on Apple, you own that, too, from the event today. Again, I preface that by saying

once again of what we asked our viewers yesterday, 140 or 170, 140 was the winner. And I was somewhat surprised by that. Which way would you have voted? Yeah, I mean, I don't think there was anything too exciting today, you know, from coming out of Apple. I think we always see a nice run up into a product release. There's certainly going to continue to be a handset replacement cycle. These phones are not going to do anything to slow that handset replacement cycle. These phones are not going to do anything to slow that handset replacement cycle. And I think, you know, when you go back to service and wearables, is this new Apple Watch for the active user? Not me. But perhaps that drives a little bit of incremental revenue for those who might not have had an Apple Watch before. Perhaps. I just think this is really going to be about

China, frankly, for Apple over the course of the next couple of months. I think your prior guest was talking about that as potentially being a tailwind if we get some reopening. That's both in production and consumption. So I'm watching China to give me some direction on Apple. All right. Appreciate it, Shannon. Thank you, Shannon Sikosha, joining us here in overtime. Thanks. Up next, we're tracking the biggest movers in the OT. Christina Parts in Lovell is standing by.

With that action for us, what's on deck? We have another retailer warning of consumer weakness and a huge, huge stock sale to one individual person. That sale worth $350 million. All the details coming up after this short break. We're tracking the biggest movers in OT. Christina Parts and Loveos is here with that. Let's start with shares of retailer American Eagle diving in the OT after a larger-than-expected earnings miss.

You can see the stock down over 12%. Like we saw yesterday with Newell Brands, American Eagle also saying demand trends remain pretty difficult and that the brand revenue is down in the high single digits. Shoppers, though, may like this news, expect more sales so they can get rid of that inventory. Definitely not good for margins. The company also suspending its dividend, and that's causing the stock to plunge. We also have software firm Asana jumping on a smaller-than-expected loss in revenue beat.

Q3 revenue guidance coming in slightly ahead. The company, though, right after they posted their earnings, also announcing it sold $350 million of common stock in a private placement to its president, chairman, and CEO, Dustin Moskowitz. If you're wondering who he is, because I was wondering, where does a man get $350 million? He's the co-founder of Facebook. And then lastly, shares of Dave & Buster's falling right now. This is the ticker play, down over 2% on a large Q2 earnings miss.

The street was expecting $1.07. The company posted 59 cents a share. Management saying they faced wage and commodity inflation. The company did beat on revenue with comparable same-store sales up about 22%. If you look at it on a year-to-date basis, though, the stock is up about 12%, not accounting for the fall today. So a little bit of a more positive mover, you know, for the entertainment company.

But down 2 percent today on that on the earnings. Scott. All right. Appreciate it. Thank you. Christina Partsanovelos up next, our two minute drill. Why one money manager is betting on a beaten down retail name. We reveal it in OT next. It's time now for our two minute drill. Joining us for that is CapTrust Director of Investments, Kristen Ledoux. Welcome. Let me first get your market view given today's big rally before we talk stock specifics. Well, hi, Scott. Thanks for having me back. We were taking money off the table at CapTrust back

in July, early August. And we just thought the market got a little ahead of itself. But we're going to do what the Fed does, which is be data dependent. And if the inflation numbers start coming in better, I think it's kind of time to start buying stocks again. So you're not putting that money to work yet? Not yet. Despite that, you do like names, and I assume you already own these. If not, tell me. Chevron is number one. You call it a hedge. Yes, indeed. You had Joe turnover on the half last week, putting it very well. You got to have some exposure in case there's

a major world event that makes commodity prices blow up. You know, the direction for oil right now is negative, and you don't want to have the little companies that are more leveraged to oil price. So that's why we pick a major, and Chevron's our pick. They have the better balance sheet and a better production profile, and they have a little bit more natural gas, which is more attractive at this stage. Retail's obviously tough right now. You like William Sonoma out of that space. Why? Well, first, it's a great company. I mean, this is a company that's compounded over the last five years, sales 10 percent,

earnings 35 percent. And everybody's predicting this downturn that never seems to come for them. So I'd like a company that's already trading at eight times earnings and is actually growing the earnings. Meanwhile, everyone thinks it's going down. Textron, lastly, why? Textron, personal aircraft, government aircraft. We all knew what was happening during the pandemic. Everyone needed their own personal aircraft. Now it's continuing to grow through that. And that's because you've got the buyers being high net worth individuals and they don't want to deal with the commercial headaches. That's not going to be fixed anytime soon. So there's plenty of buying of personal jets to come. All right. 17 percent decliner year to date. We'll see what happens from here. Kristen, thanks. It's good

to see you again. That's Kristen LeDoux joining us for our two minute drill. Up next, Santoli's back. It's his last word next. Let's get to the results of our Twitter question now. We asked, what level will oil hit first from here? 60% of you said $100. 40% said $60. Let's get to Mike Santoli for his last word. Maybe falling oil is one of the catalysts today, but our viewers say don't believe the hype. Well, no doubt it was among the catalysts. You had oil cooperate, also yields lower, dollar lower.

So three of those pressure points were lifted to some degree. You know, I guess the next $20 in oil is it feels like a pretty tricky question. But I do agree people are pretty anchored to the bullish energy story. So I think that's almost a net positive because you haven't had people throw in the towel. So maybe it has to probe more downside. I find it interesting that, you know, last week, I think a lot of folks were saying, hey, maybe the S&P on its way down can hold at thirty nine eighty one. That was the halfway mark between the June low and the August high. And here we are. We rallied back to it. It feels like a different market just because we got one day's worth of relief. Yeah, right. And you

put any what do you make a brainerd? I'll just throw it out there generically, right? She was overwhelmingly hawkish, but for a moment there was the seizing on that one little line of, well, you got to make sure you don't overdo it. Right, but I would say expectedly hawkish. So yes, it's still the party line. It's still the we're not done yet message

that everybody's been sending. But while Jay Powell delivering it in late August with the S&P at 4200 and promising pain, you know, that was absorbed over the next week or two. And here we are at S&P 3900. And Brainerd says, yes, we still have work to do. But on the other hand, we don't want to overdo it. So I get why there was that somewhat mixed response. And the bond market had already really been racing higher in yield. So I think we were, you know, on a different footing to accept that kind of a message. Well, here we go again tomorrow, right? I mean, you got Powell himself.

I think it's at Cato. And didn't get much talk today, but it's going to get a lot of talk tomorrow. It absolutely will. And this stuff can change. And we're going to get unemployment claims before he speaks. And it'll really be his last chance to say anything that addresses last week's job market before we do have that meeting coming on the 21st, because they're not going to have anything to say around CPI. Yeah. All right. I'll see you tomorrow for your last word. I'll see all of you as well. Fast money begins right now.