Closing Bell - Closing Bell Overtime: What Happens Next For Oil Prices; Top Tech Picks Heading Into Earnings 10/13/23

Episode Date: October 13, 2023

Stocks finished mostly lower today although still higher on the week – except the Nasdaq. Solus’ Dan Greenhaus and GenTrust’s Mimi Duff break down the market action. CFRA’s Ken Leon on the bank earnings coming next week and the lessons from today. EMJ Capital Founder Eric Jackson on his favorite tech picks heading into earnings season. Bespoke’s Paul Hickey on the sectors that could outperform during earnings. Plus, RBC’s Helima Croft breaks down the big move in oil this week and what’s next for Iranian and Russian sanctions. 

Thank you, Scott. And that is the scorecard on Wall Street. A little more red than green, but the action just getting started. Because welcome to Closing Bell Overtime. I am Brian Sullivan. Morgan, John, Mike are all out. Somebody alert the authorities. Anyway, let's dive in. A big day for big banks. J.P. Morgan, Wells Fargo, Citigroup making investors money today on strong earnings. And coming up, a top bank analyst on what those three could mean for other banks next week. It is not just banks either. Investor Eric Jackson here on what tech stocks he thinks are the most attractive right now, including one I think is really surprising.

The Zet sector gets ready to unveil their numbers as well. So as we kick it all off on this Friday, and interest rates, by the way, continue to rise, where is your money heading from here? Joining us now on set is Solace, Chief Economist and Strategist Dan Greenhouse, and GenTrust Managing Director Mimi Duff. Mimi, I'll kick it off to you first. Listen, tiny sample size, a couple of banks and progressive insurance, but so far, and it's early, it's the appetizer.

Are you happy with what you have seen from earnings? To your point, it is the appetizer. It was delicious today. I think there's a lot more in this earnings season. And some of the things that we're going to be looking at, as a previous speaker mentioned, the regional banks next week, how they're hanging in, how do the consumers look, what types of losses they might or impairments might have been experienced. And then in a broader picture, to what extent can margins hang in? Thus far, corporates have been able to pass along the price increases, and we want to be able to see to what extent that is sustained.

And we're cautious there. You know, Dan, I got to correct. I made a critical error. I admit that I called it the appetizer. It's four companies. It's the amuse bouche. OK, it's it's not even an appetizer. We got a tiny, just minuscule, big amuse bouche. But that's what they are. But do we do we care? Or is J.P. Morgan a reflection of anything else that's really going on in the economy? I mean, listen, you care because J.P. Morgan, Wells Fargo, Citigroup, PNC, these are big banks with loans across the economy of all stripes. And it's important to know that Wells Fargo's mortgage lending was down 70 percent year over year.

Doesn't tell me anything I didn't already know, but we can quantify it now. But but to Mimi's point, for this particular earnings season and really this environment, the regional banks that go next week are considerably more important. I 100 percent agree. You know, the key corpse, the ones because people forget that in March and April, we had that mini banking crisis, liquidity crisis, Silicon Valley Bank, whatever you want to call it, it was real. And these bank stocks, many of them recovered a bit and then fell back off. What are you most looking for in the regionals? Well, listen, I think there's a couple of things you have.

You want to watch what's going on with deposits, both insured and uninsured. You want to look at what's going on with loan growth. You want to look at what's going on in commercial real estate. And there's a couple of companies that stand out. I'm not a particularly large financial investor, but the Schwab's of the world are going to be something that everybody focuses on next week to see how much to damage the 40 extra basis points of increased treasury yields that we've seen since the mid-quarter update. What effect has that had on the available for sale portfolio and, of course, the health and maturity security? Mamie, do you agree with that? And if so, tell us why. If not, tell us then what you are watching most closely. I agree with all of that. The smaller and medium-sized banks are

under pressure to retain those deposits. It's more costly for them to do that. And another thing we're looking at is they are big holders of commercial real estate, which have significant maturities over the next couple of years. So we're going to keep an eye on that as well. All right. Outside of earnings, there's a lot of other stuff going on, particularly with debts and deficits. And this morning on Squawk on the Street, BlackRock CEO Larry Fink talked about it. Over the last 23 years, we raised our deficits by $25 trillion, more than a trillion dollars a year. That is unsustainable. So those, if we don't grow out

of this problem, and that's why I want to talk about optimism, we're dead. We can't shrink our way out of this. We have to grow ourselves out of it. So I actually believe I actually believe those are real worries. And I'm I think that's why I believe inflation is going to be higher for longer. Dan, so for years, maybe decades, debt deficits didn't really matter. Money seemed to be some sort of an imaginary construct. But when I reference, when you reference this nearly half a percent move in the last couple of weeks, which half a percent doesn't sound like a lot to our audience, but when you're talking about tens and hundreds of trillions of dollars in linked assets, it is. Are debts and deficits either going to start mattering or already have started to matter?

I think they've already started to matter. And listen, we can all quibble about the degree to which supply or term premium or all these esoteric topics are driving yields higher. But just from my anecdotal conversations with people across the street on both the buy and the sell side, it's unquestionably clear to me that for arguably the first time in my career, people actually do care about the size of the debt and the deficit. And just to put a number on it, everybody knows there's about $33 trillion in debt outstanding. Over the next 10- Up $10 trillion in three years. That's right. And over the next 10 years, the government projects that it's going to spend

somewhere around $60 trillion. The problem with that, I'm sorry, the revenues are going to be somewhere around $60 trillion. The problem with that is that the government is going to spend $80 trillion, leaving an additional $20 trillion deficit. So we talk about a $30 trillion debt load right now. If everything goes according to plan, which it will not, we're going to have somewhere around a $55 trillion deficit in 10 years. Mimi, $55 trillion deficit, arguably debt probably by, well, you never know at this rate, by the way. That's right. Probably within 10 years on conservative estimates, and that is the government's own numbers. Okay, we rely on people wanting to buy our debt because otherwise you just don't have a financial economy. How worried, if at all, are you about this topic, which does not get a lot of attention, let's be honest,

in sort of the general media, but debts and deficits are out of control. It's a big deal right now. I mean, I think it's exerting a lot of steepening pressure on the curve. That's where you've seen a good deal of steepening. There's been global pressures as well. Treasury has to fund additional supply absent the Fed. Remember, the Fed for so long was buying so many securities and masking some of this growth in the deficits. And they're right now shedding securities. So we do think that that's adding steepening pressure to the curve. We've focused our fixed income overweights in the front end where we think there's better value and less exposure to some of those pressures. Yeah. Deficits at two trillion dollars in county. But you know what? Listen, Dan and Mimi,

I'm going to say goodbye, but it's Friday. We don't want to go out on a low note. So I want to just give our audience a reason to be happy. All those debts costing each American one hundred thousand dollars. Here's the good news. College is cheap. Health care is cheap and affordable. Everybody wins. And the roads are perfect. And the food at the supermarket. That's the good news.

Yep. We can all celebrate small victories. There we go. That is the amuse-bouche of closing bell overtime. Thank you both. Obviously, a little bit of Friday snark there, folks. All right. Why do we talk about the banks so much? Because that is where the money is.

And today it's also where some money is being made. J.P. Morgan Chase, Citigroup, Wells Fargo beating on most major metrics. But we get more big money banks next week. Bank of America, Goldman Sachs, Morgan Stanley. Will they be as good? And which stocks should you look to invest in now? Ken Leon from CFRA joining us now. Ken, welcome. My debt and deficit snark aside, you must be very happy with the JPMorgan Chase numbers. Well, especially JPMorgan. It's great to be with you, Brian. And the reason is, first as an investor, then I'll be the bank analyst. We probably will have a rate cut from the Fed in the second half of next year. And talking to Sam Stovall, my chief investment strategist, financials tend to do well nine

months before. JPMorgan Chase is one of the top three constituents, not only of banks, but the entire financial sector. So I'm very pleased with JPMorgan Chase. I think Wells Fargo and Citigroup, they're both story-driven, company-bank story-driven. And, of course, they have more room to improve. But JPMorgan is going to be most important as we look ahead, particularly eventually the Fed's going to cut rates. When would that happen? You just heard us talk about the spike in interest rates. I know they're not directly related.

One, we're talking about bond yields. Now you're talking about the Fed funds rate, Ken. But, you know, the bond market will move on that. So when do you think that could happen? 2024? So, you know, prior to today or this week, you know, certainly the bar has moved to the second half of next year. The consensus from economists was probably the first quarter going several months ago.

The likelihood, though, is that we look back all the way to 1946. When you make that change to rate cuts, we're not going to have a rate pause forever, whether it's precipitated by recession or something. But when you do have that rate cut, financials and banks do well. And that's what portfolio managers are thinking about. When we get into the fundamentals of banks, the economy is good. Consumer is still strong. The credit loan loss reserves are stable. But there's other worries related to tighter regulation, increased capital reserves, and whether they get pinched in terms of how much they can return capital, such as buybacks or dividends. I don't think you can correct me if I'm wrong. I don't think you cover. I'm just a fill in anchor today anyway, Ken. I don't think you cover the regional

banks looking at your coverage list, maybe some of the super regionals. You heard our conversation just now, though. Could we learn more maybe about the economy from a super regional like a key or a PNC than a Bank of America or Goldman Sachs? And I can I can address the regional banks from the standpoint that first with the consumer, you're probably going a little bit downstream away from the best credit score, FICO scores, that J.P. Morgan enjoys. And additionally, they're not diversified, so they don't have a global footprint for business or for loans or the capital markets, trading and investment banking. So it puts a lot more pressure in terms of that real estate portfolio, where for the largest banks, they're mostly secured investment-grade types of borrowers. I think the concern also, going back to the bank crisis we had in March, is deposit risk, because there is a shift from non-interest bearing to interest bearing deposits, which sometimes may leave the smaller banks. So that is a concern.

Yep. And you're going to be busy next week as well. Ken, we appreciate it. Have a great weekend. Thank you very much. All right. From big banks to big jets, Boeing not performing today. That stock the worst in the Dow. They said they're expanding inspections for a potential defect on their 737 MAX jets. That doesn't sound good. Philip Boat joining us now with more. Phil. Really more of the same, Brian. We've heard this story before when it comes to the 737 MAX-8. That's one variant of the plane. And that's what's being checked right now in these expanded checks by Boeing and expanded inspections, I should say. They're basically looking for nonconforming work that has just come to light, work that was done by its primary fuselage supplier, Spirit Aerosystems out of Wichita, Kansas.

This new MAX issue, by the way, it is not a flight safety issue. So the MAXs that are in service around the world, they continue to fly. But this does raise the question for investors, and this is the reason Boeing shares are at their low of 2023. Will they have to change their guidance on max deliveries this year? Since the max, the resumption of deliveries starting in 2020 has been a nice progression higher in the company. At the end of second quarter said, look, we still expect to deliver between 400 and 450 in 2023. And yet when you look at the shares today, you start to wonder if investors are saying, hmm, when they report earnings in two weeks, will they have to lower their guidance? Remember, they're in a quiet period right now.

So when we asked Boeing, are you lowering your guidance? They said, can't comment on that. So we'll find out in a couple of weeks when they report their Q3 results. Also take a look at shares of Spirit Aerosystems. Again, this is the primary supplier of the fuselage and the part that is in question on the 737 MAX-8, Brian. They just replaced their CEO a couple of weeks ago. Pat Shanahan, longtime Boeing executive, is now in charge of Spirit. He's got his work cut out because these issues continue to pop up with Spirit and the MAX. Yeah, when do we get some kind of resolution on these inspections, Phil? Do we have any idea? I mean, the 737 MAX was off the market for two years because of wrecks.

And now they're doing these things. Is there some sort of end point here? They are making progress. You know, we've seen a number of these cases where they are doing either rework or inspections on a particular issue with the Max. And it gets a lot of headlines when they say, hey, we have notified we've seen this. We're doing the inspections and it it may delay deliveries for a while. Later on, whether it's a week or two weeks later, it gets resolved, and they start doing this, and they start ramping up their deliveries again. The reason the shares are down today, Brian, is because people say, here we go again. Another case where you've got to do some inspections here.

So we'll see in about a little less than two weeks whether or not they're going to have to modify their delivery guidance for the year. Okay, two weeks. Philip O. on Boeing, thank you. All right, we got a lot more to do here on Overtime, and up next, investor Eric Jackson revealing his top tech picks heading into next week, plus a huge pop for oil today, tension in the Middle East rising, the cost of energy rising with it. Lima Croft here to talk about that and why Iran is on the tape bragging about their record oil production today. All right, welcome back. Not a great day for tech. The Nasdaq down more than 1% today. However,

earnings and results from growth names like Tesla start pouring in next week. Joining us now is EMJ Capital founder, Eric Jackson. Eric, good to have you on. You know, you may have just heard our conversation about rising rates as it pertains to banks and debt. Rising rates may not matter to Apple, but my guess is they probably matter to two stocks you like, a Tesla and a Rivian, because unless you're paying cash, you're borrowing money. What's your take on the rate tech relationship? Hi, Brian. Good to be here. It matters, but it doesn't matter as much as it did back in 2021 and 2022 when we were first getting off the drug of free money. So, you know, rates are up about the 10 year yields up about 34 percent over the last six months. The Nasdaq's up 10 percent over that time period. So I think a lot of the pain

of adjusting to higher rates happened in 2021 and 2022. And even in the last three months, when rates have been really sharply accelerating, you know, the NASDAQ has been, you know, roughly flat or down a bit. So it matters, but I think a lot of tech has taken its medicine in terms of the correction in the prices. So it just, I think investors are looking ahead.

There was news today that Tesla's share of the EV market was, I think, the lowest it's ever been. But I don't think that's that surprising, given the fact that everybody now has an EV. I mean, every every manufacturer produces one is my point. So the competition is more out there. Are you looking more at market share? Are you looking at margins? Some investors have been frustrated with these Tesla price cuts. They're trying to grab market share, but some investors like Gary Black are like, hey, you're probably leaving a billion in revenue on the table. Well, I think it speaks to their position of strength and the fact that they've been at this for 15 years and just what a lead that is compared to, you know, all the startups that are trying to, you know, make money

from EVs and, of course, the big three and dealing with their strike and how that's going to increase their costs. So I think, you know, Tesla, you know, the forest for the trees here is that this is the EV gorilla that makes money and will make money for a long time and so. We can fret- and the bears can see you know say that the gross margins are going down or something but. Think about the stock this is taking so much bad news this year.

There means supposed delivery misses- gross margins have been lower than they have been for a long time- and- and you end up at economy hanging over every everybody in the rising rising time. And the bad economy hanging over everybody and the rising rates. And yet this stock is up 107% for the year. And I think a lot of the bad news about price cuts is behind them. So I'm watching next Wednesday to see what the gross margins will be.

I'm optimistic that they're going to hold to their word, that it's going to stay way ahead of the big three automakers with their ICE technology. And that's going to be something that the market embraces. Yeah, and the UAW strike, which we have covered extensively on last call, 7 p.m. Eastern. Tune in, by the way, Eric. Will that have an impact at all positively, negatively on Rivian? Yeah, Rivian has been kind of forgotten about. But take a step back. They're actually doing second best, I would say, after Tesla in the EV space. And a lot of people got upset with

them because they did a billion dollar convertible debt offering a week ago. The stock went from 23 to 19. But, you know, again, looking at the big picture, they're going to do 52 000 deliveries this year so basically they are they are tesla back in 2015 and yet the funny thing about it is that at 18 billion dollars market cap they traded about half of the market cap that that tesla did back then and that's before you know we we got we dealt with a whole pandemic and tesla really took off and went on steroids so i don't think Rivian is aggressively priced here. It's always good to raise cash. There are more and more of these SUVs on the roads and the trucks.

But, Eric, I'll just say this. I'm very familiar with the R1S. I'll just leave it at that. They're losing money on every car. I mean, $30,000. That's a lot of money. But they're moving in the right direction, Brian, I would argue. I'd say they're losing less money than they used to. And they're on the trajectory where they're going to start

making money on every car starting next year. And that's what they've guided to. And I think what Wall Street and what the Tesla story shows is that investors, when they see that inflection happen, that's a great time to own the stock. And you are I mean, I'll just be clear. There were some analysts that were frustrated with to your point, the equity raise kind of blindsided. Dan Ives told us that he's like, I felt misled by management. You come out of this equity raise convertibles and all of a sudden, you know're caught off guard do you trust that they will be able to figure out how to sell a truck or an suv profitably at 30 grand is not three grand that's a that's a big gap it's a big gap but it was you know i guess in their defense they were losing

over 100 grand not too long ago for vehicles it is moving in the right direction. 52,000 in deliveries this year is nothing to sneeze at. They saw an opportunity to bring in some cash, to have it sitting around on the balance sheet. I think they're still way ahead of a lot of their competition, including the big three when it comes to EVs. The big three are in the dark ages when it comes to EV technology and making money from what they're doing there. So I think I'll take Rivian's Gantt any day over them. And, you know, it's a riskier stock, but they are on the right trajectory, the same path that Tesla trode.

Yeah, because I think manufacturing is hard and the technology is extremely different. And when you start from scratch, you might inherently have an advantage over the big legacies, in part because of like what we're seeing now, workers who are nervous about their jobs. We're watching Rivian, we're watching Tesla. We didn't get to Apple, but that's next time. Eric Jackson, have a great weekend. Thank you very much. All right, up next, why what's happening with the banks today is breaking with a little recent history. Hey, maybe it's the Friday the 13th effect.

As we take a short break, let's take a look at insurer Progressive. Progressive Insurance closing at an all-time high. They crushed earnings because, as you know, insurance costs are going up, up, up. We're back after this. All right. Hope your Friday is off to a good start because earnings are off to a good start thanks to the banks and progressive insurance. But it's early. So what can history tell us about where this all goes from here? Who better to ask than maybe the king of stock market history himself?

That is Paul Hickey, a bespoke investment group. And I'm going to quote Paul Hickey to to Paul Hickey. And if I'm extracting your latest note correctly, Paul, basically the banks are not necessarily the greatest predictor of how things ultimately go. Yeah. So you could say that, Brian. And I mean, I know this is early for you, but I mean, you said Friday's off to a good start. The market closed about a half hour ago. So but yes, we are looking at the earnings season coming into this earnings season. And what everyone focuses on coming into earnings, you know, you always hear this is where estimated earnings are for the market. And this is the number. So for this year, we're looking at about 220 on the S&P. Those numbers matter a lot over the long term. But for the short term coming into earnings season, they're pretty much meaningless. What really you want to focus on during earnings season is the direction of analyst revisions. So are analysts raising forecasts going up into earnings season? the direction of analyst revisions. So are analysts raising forecasts going up into earnings season, or are they trimming forecasts and becoming less certain

of their estimates and bringing things in? And what we've seen coming into this earnings season is that the pace of downward revisions has been very high. So on a net basis, 17% of companies in the S&P 1500 have seen their forecasts lower. So what does this mean? The key is when you have that level of downward revisions, you're basically setting the bar low heading into earnings season, and it makes it easier for the companies to exceed those forecasts. So you just look at today with the financials reporting, they all pretty much handily exceeded EPS forecasts, and most of them exceeded their sales forecasts. And you look at stocks like JP Morgan, Wells Fargo, and Citi, which were basically up on the day, and because they beat their earnings and sales forecast. So that's what

you have the backdrop going into earnings season. And so it sets the stage for a positive trend during earnings season. All right. So there's a lot there. But the takeaway then is the last thing, which is the positive trend earnings season. If banks aren't that great of some kind of crystal ball, is there any part of the market, one stock, a group of stocks, a sector that is kind of a better tell? You know, so it's it's hard to say these days there isn't necessarily one specific stock that you would look at. Years ago, it used to be IBM. IBM had the highest correlation to the market. And that's that's faded at this point. What was that? You faded at this point. When was that, 1985?

When you look at individual sectors, going to the level of forecasts, you have the S&P. When you've seen the level of revisions this high to the downside, you've tended to see the market go up close to 4% during earnings seasons. And that goes back to coming out of the financial crisis in all the quarters since then. Whereas then if you have analysts raising forecasts, the average return during earning season is flat, isn't very good. Paul Hickey, we're going to leave it there. So maybe a positive start. The moves down are less than they were a couple of years ago.

I'd like to leave it on a positive on a Friday. Paul Hickey, appreciate it. Thank you. Low bar, yes. All right. It is time now for a CNBC News update. Here's Bertha Coombs. Hey, Brian. Prime Minister Benjamin Netanyahu said Israel's retaliatory attack on Hamas is only the beginning. In a late-night address, the prime minister said that Israel is striking its enemies

with unprecedented force and that Hamas has only started to pay the price. The White House, meantime, says North Korea has sent more than 1,000 containers of military supplies to Russia amid its ongoing war with Ukraine. And National Security Council spokesperson says the U.S. believes North Korea's leader, Kim Jong-un, is sending munitions to Russia in exchange for sophisticated Russian weapons technologies. SpaceX's Falcon Heavy rocket launched this morning on a NASA asteroid mission. The asteroid is thought to be made mostly of metal, but NASA wants to know whether it's actually the exposed core of an early planet. But it's going to take a while to find out. It's more than two billion miles away, and the trip is expected to take almost six years,

about the amount of time, Brian, it takes to get across the George Washington Bridge during rush hour. On a Friday, right now? Yeah, six and a half years, maybe the under on that. Bertha Coombs, cool space story. Thank you. All right. Got some breaking news right now on the House speaker vote. Let's get right now to Emily Wilkins in D.C. Well, hey, Brian. So the House is again trying to figure out who their nominee will be after Steve Scalise won the Republican nomination, but was unable to get that 217 number that he's going to need for the floor. Now, another round of votes have just been had. And now Jim Jordan is the new Republican nominee for speaker.

Now, we don't have a final vote tally yet. But from what we are hearing, Jordan got around 120 votes. The person, though, who got the other group of the votes, around 80, Austin Scott, he just threw his name in just a couple hours ago. He told me that when he woke up this morning of the Republican conference voting for him with no campaigning, no lead time, really shows that a lot of members have serious concerns about Jim Jordan being in the speaker's chair and what that would mean for their party. And we had members really lay out what some of those concerns were. Mario Diaz-Balart, Republican from Florida, mentioned that it didn't seem like Jordan

could get his allies to go along on a number of other votes. And he's not quite sure how Jordan's going to be able to make sure that those holdouts come along on big issues like Ukraine and the government shutdown. Now, Republicans are voting again. This time, the vote is on who will support Jordan on the floor. So instead of two nominees, a yes or no on Jordan. It's just not clear that we're going to see any actual speaker votes today, though. A lot of members have gone home, a lot more planning to go home. It's unclear when we're going to be able to get a speaker here. Brian? Well, the drama continues. Emily Wilkins, glad you're there. Thank you. Sure, we'll see you again. All right, up next, Iran on the tape, bragging about their oil boom. Lee McCroft is here to break it down. And as always,

do not forget, you can catch us on the go or anywhere you are by following the Closing Bell Overtime podcast on your favorite podcast app. We'll be right back. All right, welcome back to Overtime. It was a big day for oil, crude popping again over 4%. All this after the White House saying it will tighten or maybe retighten sanctions against Russian oil exports and adding that two tankers carrying Russian crude violated its price cap of $60 a barrel. This, by the way, one of the first time that the government has given us this kind of information

since those sanctions were put in place about a year and a half ago. All this happening is Iran's oil minister saying in a speech today in Tehran and reported by Argus Media here on X, that the regime's oil production was just over 2 million barrels a day two years ago, but is now over 3.3 million barrels per day and headed for a new record. All this as Iranian oil exports have also surged and enriching the country by over $40 billion from 2019. Money, of course, that it can use for nefarious purposes. Let's

talk about more about all of this and bring in RBC Capital Markets Global Head of Commodity Strategy, CBC contributor, and somebody who tipped me off to that tweet. Halima, thank you very much. I mean, Iran almost seems to be bragging, kind of throwing it in the world's face how much oil they're producing and selling. A hundred percent. And Brian, we continue to highlight the biggest story in the oil market to watch stemming from this terrible crisis that we're seeing in Israel and Hamas is whether Iran will be directly targeted for their role in sponsoring Hamas. Now, there are questions about the exact role they may have played in orchestrating this attack. The Wall Street Journal has said there was direct coordination. The White House is unwilling to say that. But no one is disputing that Iran funds Hamas, supplies them with weapons,

which leads to the question, if we are tightening sanctions on Russia, trying to enforce the price cap. Will the Biden administration come under pressure to tighten the existing sanctions on Iranian oil exports? Iran remains under sanctions. They have not been waived. The question is, will they be enforced? Honestly, listen, you may not agree with this, Salima. I think it's kind of a head fake for much of the media that doesn't dive in as much maybe as you or I do. It's like, look over here, Russia, we're going to two ships. We're over $60. You know, look over there. There's $6 billion in the Qatari bank. When Iran has had added over $40 to $50 billion in their foreign currency reserves in the last three years and were partisan bickering over $6 billion and two Russian ships. A hundred percent. I mean, the real revenue haul that Iran has been able to accrue

has come from increased exports. And again, it's fascinating to me that this rise in oil prices today has been linked to indications that we're going to tighten sanctions on Russia, when the biggest question going forward is, what are we going to do about the Iran exports? I mean, Secretary Yellen was out saying

we have not relaxed the sanctions, but the question is, have we actually enforced the sanctions? And so the question is for the Biden administration in the coming weeks, are you going to have to take more concerted efforts to try to basically close the bank for Hamas? Can you do that? I mean, do you think there's only two ways to look at this, Halima. Let's be let's be intellectually honest. I know that the White House won't be happy about it, but you either are not enforcing the Iranian sanctions or you can't enforce the Iranians. One of one of those two things, I think, must be accurate. I mean, look, if you look at what happened when the U.S. essentially ended exemptions from forges of Iranian oil in 2019, we did see a significant drop in Iranian oil exports. And yes, Iran is using a shadow fleet of tankers, much like Russia is using a shadow fleet of tankers now. But could there be more work to target ship-to-ship transfers? That is really

the question. Can you also go after some of the Chinese refiners that are accessing U.S. capital markets and essentially say, you can continue to do business with the United States or U.S. regulated institutions or you can take Iranian crude? So there are measures that the administration can likely take to at least drive down some of these exports. Maybe you don't get 700,000 off the market, but you take three or four hundred thousand off. Yeah, there's basically one tanker a day of exports three years ago. Now it's three to four based on the numbers. Many of those, to your point, hidden from trackers or they move the oil around. But it's an unbelievable story, especially what we saw over the weekend. Halima Croft, thank you. Thank you for having me. All right. Very welcome.

All right. So let's stay on energy this time of a different kind, and that is hydrogen. The Biden administration today saying taxpayers will subsidize about $7 billion worth of new investments in hydrogen. It is a big deal and it could even benefit, by the way, companies like Exxon who are getting into hydrogen. Diana Olick has more on this big investment story. Diana. That's right, Brian, and it's from the Bipartisan Infrastructure Act. These hubs are both producing and using hydrogen fuel, a fuel which emits no carbon dioxide. So the regions, which span 16 states, will move toward the hydrogen economy first. Now, the seven hubs will be public-private partnerships with nearly $43 billion in private investment.

The hubs will also create tens of thousands of jobs, according to administration's officials, who said that will bring the total investment in hydrogen hubs to nearly $50 billion, one of the largest investments in clean energy this far. Now, one of the chosen hubs, the Appalachian Hydrogen Hub, which covers parts of West Virginia, Southeast Ohio and Southwest Pennsylvania, is a transportation crossroad. And some of the companies that have signed on to work with that hub and will benefit, of course, from this government money include Baker Hughes, BlackRock, Nucor and Enbridge. Another, the California hydrogen hub, is the largest in terms of total money invested and is part of the build out of area ports. Companies involved in that one are GE, GM, Microsoft, Chevron, Amazon and Boeing.

And administration officials say altogether, the hubs are expected to produce three million metric tons of hydrogen per year, which is nearly a third of the U.S.'s 2030 hydrogen target. Brian, I don't know how much you watch this network called CNBC, Diana, but last December, me and my producer Harriet Taylor were kind of freezing, but trying to cover a story in Rotterdam. We went to Shell's new massive sort of blue-green hydrogen hub in the port of Rotterdam, and we talked about it. And what was amazing to me, I don't know a lot about hydrogen, I'm learning, is that number one, it's not an energy source, it's basically a battery, it's an energy store. But it's kind of, to your point, an offshoot of oil and gas because

they actually converted an oil refinery into this hydrogen hub. So it might tick some people off. I think that a lot of this seven billion may be going to the to the Exxons or some oil and gas companies. Yeah, but isn't that part of the clean energy transition? I mean, we see it in other parts as well, whether it's changing away from methane or into hydrogen or into other forms of fuel that a lot of the big oil companies are, there's blue hydrogen. I could, you know, take up the rest of your show and explain it. But there's just a lot of opportunities in the space and the energy companies are going to have to get into it. That's it. And we tried to show how it worked in Europe with the offshore wind farms powering the hydrogen facility. And maybe the dream of the hydrogen car will eventually, eventually occur.

So, Diana, it's a big story. Big investment. Thank you. All right. Talk about Hollywood's wildest dreams. First, she sold out our stadiums. Now Taylor Swift is selling out our movie theaters. But maybe don't bring your phone into the theater. You may not be allowed. We're going to talk about the eye-popping box office numbers of just Taylor Swift, who is slowly taking over the world

and also the Kansas City Chiefs. All right, those are some of the winners and losers during the regular session, but we have got some breaking news on Pfizer. Pfizer stock getting hit hard in overtime. Angelica Peebles here with more on why. Angelica. That's right, Brian.

Pfizer is slashing its guidance for the year. It's now saying that it expects about $1.45 to $1.65. And that's down from $3.25 to $3.45. And they're also expecting revenue of $58 to $61 billion. And that's down from $67 to $70 billion. And the biggest driver of this is reduced demand for their COVID products, of course, their COVID vaccine and their antiviral Paxlovid. And the company is also saying that they are going to cut costs because of this lower demand. The company expects to cut about a billion dollars this year. And they're also writing down some of that inventory.

The company is giving some of the Paxlovid supply back, or the U.S. government is giving it back to Pfizer. That'll be an estimated about 8 million doses of Paxlovid. But they're saying that now they're going to be able to commercialize Paxlovid for the private market going forward. So really a lot going on here, and it's what we've been expecting as the pandemic, that really emergency phase kind of winds down, and now we go into the endemic phase. Do we know, okay, so when COVID hit, in fact, I actually used in my morning show, I built an index about percentage of vaccinations against the population. We did the vaccination numbers almost daily. We got the news.

From what I understand, we're not we don't know from the CDC. Do we, Angelica, what what the vaccine uptake is? I think they stopped providing that data a few weeks ago. I got to look through the Pfizer stuff, but do we have any clue from either these companies or the government how many people are actually getting the latest booster? It's a good question. And I actually reached out to the CDC a few weeks ago, and they are trying to figure out what the best way to track those numbers going forward is, because like you called out, they did stop releasing that updated data. And of course, we've heard anecdotally that it's been hard to find these updated shots in the first few weeks

since they were rolled out. But whether that's just people who really want these new vaccines going out and scouring pharmacies or whether that demand is going to last going forward, we have to see. But Pfizer you know, Pfizer has been talking about Pfizer and Moderna have been talking about how this quarter will be critical to provide those numbers. And now we're getting our first look at what these companies are expecting. Do we have any idea why they stopped publishing the numbers? It's a good question, and I think it has to do with the public health emergency winding down. A lot of data collection changed, but also

CDC and its response to me at the time said that they're just trying to figure out the best way to update these numbers going forward. How about just track how many people get the shot? Yeah, that could work. Like they did the last time. It's bizarre. Angelica, what is the shot? It's not free now. What does it cost? It's like a hundred bucks, isn't it? Maybe that could be a reason a lot of people are priced out. It depends. If you have commercial insurance, you should be able to get these shots for free. Of course, not everyone does have commercial insurance.

There is a program from the federal government for people who are uninsured. But some people were experiencing some hiccups early on where they were being asked to pay for that shot out of pocket. All right. Big story there. Pfizer and Moderna down 5 percent. Angelica Peebles, thank you very much. By the way, we're getting more breaking news from D.C., I understand, from Emily. Everything's just it's Friday. Can we just calm down? Just keep it easy. All right. For Hollywood, this weekend could be enchanted when Taylor Swift's The Era's Tour concert film hitting theaters. Find out how much is at stake for the Fox office later on Overtime.

All right, let's get back down to Emily Wilkins in D.C. Emily. Hey, Brian. So we now know that Jim Jordan will need to get 55 of his colleagues, convince them to go from a no to a yes. They just took a vote in here. 152 Republicans said they could back Jim Jordan on the floor. That is far short of the 217 that he is going to need if he wants to become the next speaker. You know, Republicans, they've had a lot of meetings this week. They're now going to go home. Jordan's going to continue to work on

getting the consensus that he needs. And we're not clear exactly when a floor vote took place. I had one congressman who told me that it could be on Tuesday, but certainly things are in flux here on Capitol Hill as we go into a weekend with no speaker. Brian? Emily, thank you. All right, up next, find out how much money Taylor Swift's Ears Tour concert movie could rake in at the box office this weekend. And by the way, tonight on Last Call, Gerber Kawasaki, CEO Ross Gerber, talking about what is driving Tesla's share of the U.S. EV market to a new low, but why he remains very optimistic. That is tonight, Last Call, 7 p.m. Eastern, 4 p.m. Pacific, 4.30 in Phoenix, whatever time it is there. We'll see you tonight. We're back right after this. All right, welcome back.

You might have heard that earnings season kicking into its second week next week. Bank of America, Goldman Sachs, Morgan Stanley, Netflix, Tesla, United Airlines, and Johnson & Johnson. Just some of the big names set to report results. There's also a lot of economic data on tap next week. You get data out of the housing industry. Homebuilder sentiment Tuesday. Housing starts on Wednesday. You got the Fed's Beige Book as well.

Thursday features existing home sales and weekly jobless claims. But there's something else to keep an eye on. And that is potential blockbuster results for the Taylor Swift concert tour movie. Julia Boorstin has more. And whether or not the rumor is true that you're not allowed to take your phone or something into the theater. I don't know about that rumor, Brian, but I will tell you that Taylor Swift's concert movie is already off to a massive start, bringing in $2.8 million from Thursday previews at 2700 theaters. The film could gross up to $150 million domestically in its opening weekend, according to Comscore. It's playing at nearly 4,000 theaters. And then

internationally, that international launch is projected to bring in as much as $50 million more. Now, a week ago, the film surpassed a record $100 million in advance ticket sales, according to AMC, which is distributing this film. But despite this weekend's hit, it's worth noting that theater stocks were down today. AMC, certainly more of a meme stock, but still down nearly 14 percent. Cinemark down over 5 percent and IMAX down nearly 2 percent. J.P. Morgan noting of Swift's film, followed by Beyonce's concert movie, saying, Concert films are incremental, but not a game-changer for theaters.

We note that both artists are unique in the popularity of their live tours, with a large number of fans unable to obtain tickets. We further highlight that the era's film took advantage of a lull in the slate due to the strike. That's a key factor to watch. Brian, back to you. I was exactly wrong. Movies don't want you to use your cell phone, but apparently they want you to use your phone

in this one. There you go. That does it for us on Overtime. I'll see you on Last Call. Fast Money begins right now.