Closing Bell - Closing Bell Overtime: What’s Next For Your Money? 9/28/22

Episode Date: September 28, 2022

A slew of differing market views surfacing at CNBC’s Delivering Alpha Conference today. So, what’s actually next for stocks? Ritholtz Wealth Management’s Josh Brown weighs in. Plus, reports surfaced that Apple no longer plans to ramp up production of its new iPhone. Dan Ives of Wedbush breaks down the implications for the company in the long term. And, Mike Santoli gives his Last Word on today’s market rebound.

All right, Sarah, thank you very much. And welcome to Overtime, everybody. I'm Scott Wapney. You just heard the bells were just getting started from right here at CNBC's Delivering Alpha conference in New York City. In just a little bit, I'll be joined by the founder of a $17 billion hedge fund on how she is navigating these turbulent times in the markets. Look forward to that conversation, as I do with star analyst Dan Ives. He's also here on worries about Apple's iPhone production. Talk to him about what's real, separate fact from fiction, what it could mean for the stock. We begin, though, with our talk of the tape, the state of stocks and whether the worst is still to come or not. Differing views here at Delivering Alpha from some of the biggest and most important investors in the world. So let's ask Josh Brown. He's also here with me today. He, of course, the CEO of Ritholtz Wealth Management. He's a CNBC contributor. It's great to have you here on set. What a location. What a location. It's been a great day. What a day in the market. Is it as simple as watch yields and then you see what stocks are doing because it's correlated very much. Yields fall, stocks rip.

It's so funny when you walk around here and you talk to people who come from different disciplines on Wall Street, different investment styles. Everyone has their own answer to why the bounce. You talk to a technician, they'll tell you it's a DeMarc count. It's 13 counts or whatever. You talk to a bond person, they'll tell you, well, the yields are giving you a break today. It's really the first time that fever is broken. Look at that drop in the 10-year. Look at the drop in the 2-year. All of a sudden, it's one day out of the last 25 days. You don't have to worry about the effect of higher interest rates. And then you look around and say, what do I buy? But now you also have stock-specific news in both directions. Apple is notable. According to my team, the S&P's gain would have been one

of its best one-day performances in the last couple of months if Apple were just doing what the overall market is doing. But it's actually a detractor. It's such a big stock. It's 7.5% of the S&P. So if Apple were playing along with everyone else, today would have been a much bigger up day. And Netflix. And this is not necessarily a market leader it's kind of its own story but that is one of the hardest hit spaces communication services that's the worst group of the year netflix is one of the biggest market weights in that group and this is noteworthy that a company could actually have fundamental news to drive the price higher that has absolutely nothing to do with j Powell. And I think for

people in this market, that's a refreshing development. You don't often see Apple, for example, go down, you know, a couple of, I mean, and now it also closed off of its lowest levels, but you don't see often Apple go down the way it did and the Dow finished up the magnitude that it did. So your point's well taken, but how much of this, and I know people are pointing to this, this intervention in the UK, how much of it is, we know it's taken pressure off of the system, but how much of it is also like, okay, it took something about to break in a market for a central bank to flinch. It's a precursor of what might happen here. They flinched, we'll flinch. Well, if and when we flinch, I can't tell you what the effect will be three months out, but I can tell you the day of, this would be like a dress rehearsal. So I think you make a very good point. Like, if people are sitting on the sidelines and they're saying, what happens if there's only two or three more rate hikes and that's the end of it? Do I have enough exposure? No one's really been thinking that way until today. So I do think the return of QE absolutely is giving people a reason to think twice.

Right. People have been so intent on thinking about QT and the implications, negatively so for stocks. Some would suggest of that. I mentioned at the top of the read here the differing views, if you will, here at Delivering Alpha, at least somewhat, and they're nuanced, of course. Stan Druckenmiller talks about a hard landing, if not worse, next year. I had a conversation a short time ago with Citadel's Ken Griffin. Wasn't as negative, and maybe wasn't as negative as perhaps I thought he might be. Here's what he said.

Let's react on the other side. It's a very uncertain time. We're grappling with the threat of nuclear war in Ukraine. We're grappling with unprecedented central bank interventions. We're grappling with record high inflation in the United States in our lifetimes. So we're in a very uncertain time for investors. And fortunately, the U.S. equity market, although down quite a bit for the year, is showing a level of resiliency. And the U.S. economy, most importantly, is still strong for people who are going to work every day. Certainly did not give you a sky is falling point of view. He did note the strength of the consumer.

And, you know, maybe that maybe that continues and how the stock market's been so resilient. So. All right. So I would just start by saying, like, if your expectation was you were going to come here today to the beautiful glass house on the west side of Manhattan and Stan Druckenmiller was going to give you the warm and fuzzies like, you know, that like that's like you go to see Dolly Parton and she doesn't do Jolene. So what did I come here for? So that's what you're getting in that session. There's nothing wrong with it. I've been watching it for 10 years.

He's one of the greatest of all time. And he's giving you the bear case in as eloquent a way as you're going to get it. What Ken Griffin said that was most interesting to me and I think has the most ramifications for most people watching this program is the return of the 60-40 portfolio. Keep in mind, this is an alternatives guy. He's not pitching a 60-40 portfolio. And it's very rare that you'll hear a hedge fund say, no, actually, that's going to work. That's pretty good.

Well, at a time when people are questioning whether it is the right strategy anymore. Not only did he not suggest it was the right strategy, he said this was a great time for it. I'm so glad he said that. It's something that I think I've been trying to say. I don't say it as well as he says it or as succinctly as he says it. But what would you rather give a bag of cash? What investment environment would you rather walk into? One year ago today, the one year Treasury is seven basis points in yield. Effectively, net of inflation, you're paying the government to hold your money.

And stocks are selling 24 times earnings. Now you've got a 15.5 forward PE, and on the 40% side of a 60-40 portfolio, you actually are earning a rate of return that could be above CPI. So positive, real rate of return on the 40 part. What were wealth managers saying to their clients about the forty part of the sixty forty for the last three years

they would they would say at least it gives us optionality at least it's ballast for the portfolio dot you have to wink to talk about the forty part not so anymore four percent in in in in in yield, real rates of return coming back, looking at taxable equivalent yields in muni bonds, somewhere close to 6%. Looking at corporate paper at 5% plus. We haven't had a situation like this in a very long time. And I was glad that Ken brought that out. Are we questioning today whether we have seen a peak in yields?

Did you see the move lower in yields, by the way? The 10-year is down 30, 3-0 basis points in less than 24 hours. Don't trust me on my timing of this sort of thing right now. I'm ice cold. But I had thought that we would get a blow off top in yields on the on the last seventy five basis point i was not counting on them raising uh... to four and a half percent as as the terminal rate for this year uh... do they do that again we talking about five percent the next time is a

hot inflation report if we are and this is not the top of yields don't rely on my judgment there but i would say i talk to wealthy people all day for a living uh... we are hearing from a lot of people that they'd be fine with 4% if we're going into a recession in 2023. They're perfectly happy with that level. And if enough people feel that way, not just here but around the world, it would be tough to see a scenario where yields continue to push higher.

There might just be too much demand at current levels of yield. Not to mention currencies, right? I mean, the dollar down today versus the euro and the pound, and that's helping to relieve some of the pressure too. Let's bring in now two more voices to our conversation. We have Eugene Profit joining us today. Profit Investments, the CEO.

Mira Pandit with us, J.P. Morgan, asset management, global market strategist. It's great to have both of you with us. Eugene, do we have a lot more downside to go in stocks or not. Scott I hope not. I mean certainly we can go down. I do think that the Bank of England today helped us a lot. I really think that because the Fed has been raising so quickly and not given a lag effect time to come into play, I think investors today are just reacting to the fact that if something structurally happened within the U.S. markets

or U.S. economy, that the Fed would actually slow down and pause. And I think that that actually gave investors a little bit of relief. So I think that going into November, if we're still looking at 75 basis points increase uh we probably will be going down further than we are here today maybe down another 10 but i'm kind of in the camp that um inflation will be moderating and that cooler heads will prevail and the concern around unintended consequences will be looming quite large and that we probably will see more like a 50 basis point increase and I know I'm alone that. Close to being alone yeah. Mira a

temporary relief today or do we have something we can build on to get. A sustainable balance let's let's put it to that way not something to suggest that the bear markets over. But can we put something together here based on this action over in the

U. K. the relief you're seeing in currency markets and in treasury markets. Markets love an accommodative policy intervention. That was very clear today when we see that huge reversal in yields. But what I am a little bit nervous about is we tend to see, especially in the U.S., we have these oversold conditions, that we do see a shallow relief rally. But I do question a little bit the durability of this relief rally here. You know, I think that we're most of the way there in terms of seeing this market sell off, you know, 70, 80 percent there. But I don't know that we're all the way there yet. And what concerns me slightly about the rally today is that we don't necessarily

have new information as it relates to the Fed. In fact, over the next 10 days, we get very little new information when we think about the path of rates going from here. We have to wait until that jobs report that comes next Friday, wait until another CPI report, and we'd like to glean a little bit more information on corporate America from earnings. So I wouldn't necessarily trust the market movements that we're likely to see over the next couple of days. But when we think about are we close to the bottom, I think we're pretty darn close, but perhaps not quite there yet. So we still want to be a little bit cautious when we approach this market. I mean, another thing that we saw today and over the last couple of days is that the ceiling on where the

Fed funds rate goes has moved from above 4.7 percent to below four and a half percent. Again, on not a lot of new information. So I think we're still in discovery mode here. Mira, I want to I want to follow up on on something that you said about us not having new information. Definitely true. But we are starting to see data indicating very clearly that the Fed is getting its way in some of the areas of the market that had the most pernicious rates of inflation. So obviously, the most obvious one that comes to mind is home building, housing, shelter costs, however you want to frame it. We're now looking at the refinancing market through the floor, down 84% year over year at a 22-year low. When you think about details like that and what you're seeing in shipping and what you're seeing in energy, isn't it likely that enough of that

data piles up and we can say that we have new information? So we don't question the direction of travel. We question the speed. It is clear that there is a lot of disinflation around us in a number of different areas. The question is, how quickly do we get there? And can the Fed set us up for success in terms of providing a number of different areas and criteria for what they consider an accommodative policy or an appropriate policy stance? But can they give us enough clarity to know, are we there yet? And what I mean by that is the Fed has said, you know, some combination of positive real rates, a softening labor market, disinflation will determine the ceiling on the federal funds rate.

And yet, let's take real rates at a positive level for an example. If we think about the projected ceiling on the federal funds rate of 4.6 percent, by the time we potentially get there in their February 1st meeting of next year, we might see that that is higher than PCE inflation. It's very unlikely to be higher than CPI inflation. And yet we've never seen the Fed stop hiking when CPI is above the federal funds rate. Yet if we look at the tips market, positive real rates. So we're getting a lot of mixed signals from the market. And that's why, you know, we are getting new information, but it's really hard to interpret in this environment. So the other thing

you allude to, I think, is what the Fed is going to continue to do and the continued speed in which they're going to do it. And that has been a big topic of conversation over the last week at minimum. From those who suggest the Fed has already gone too far and they've done it too fast and they need to sit back and now see everything that they've already done go through the system. Again, I talked to Ken Griffin about that too. The question of whether the Fed has done too much and should stop. Listen. From my vantage point, absolutely not.

We should continue on the path that we're on to ensure that we re-anchor inflation expectations. There's a psychological component to inflation that we need to make sure that our country doesn't start to assume that we should expect 5 or 6 or 7 percent inflation. Because once you expect it broadly enough, it becomes reality, becomes the table stakes in wage negotiations, for example. So it's important that we don't that we don't let inflation expectations become unanchored. The shorter version of that, Eugene, is stay the course. That's what Ken Griffin suggests that the Fed should do. Stay the course in fighting inflation. If they, in fact, do that, what does it mean for stocks over the next six to eight, nine months? I think they're down.

And I do agree with them on the psychology of inflation should not be allowed to get anchored into the system. Where I disagree is that I don't get a short pause for the Fed to allow time to see the impact of the increases already in the system, what they will do in the economy. They can always start up again. It's not necessary for them to stop and cut. I think that it's more likely that the margin compression that's going on with earnings and the currency fluctuation impact on those same earnings are going to be a big impact in this earnings season. And I'm more concerned about the fact that we've gone a lot further to a negative macro economic environment

than we've allowed time for those rate increases to show us that very case. That's the case that I get Jeremy Siegel obviously would make the bottom line though, Josh. The bear market exists as long as the Fed is hiking and telling you that they're going to do more. Is that what we think? Well, the dot plots have historically not actually told you a lot about when the cycle would end and where it would end. I wish they were that predictive. Even the Fed, in its own remarks, consistently reminds us this is just the way the committee feels at any given snapshot. In time, it's not set in stone. They're not carving it out and they're

not saying this is definitely where we're going. So I think as much as we overreact to, oh, four and a half percent, it's really important to remember that four and a half percent could be four percent should the data materially deteriorate. The Fed will tell you that consistently. They're data dependent. We haven't seen all the data yet. That'll affect how we're thinking in the month of November, let alone December. But you must think that rates are going to continue to be at least where they are, if not higher, that the economy is going to hang in somewhat if you repitched J.P. Morgan on your own blog. I mean, it only works in that scenario, doesn't it? Yeah, but I think a really good framework for what the Fed may or may not do is to watch the two-year the two-year has been

on an absolute rampage uh... but the two-year is almost the shadow fed if you'd followed that framework of the last couple years you've been more right than wrong uh... watching the weight at which that two-year yield is falling today it doesn't have to be permanent it's a good reminder for the investing public that there's no such thing as a one-way trade. Everything can back off. And that includes short-term interest

rates. All right. Good stuff. You're going to stay with us. Josh Brown will be here until they kick him out. Eugene and Mira, our thanks to you as well. We'll talk to you soon. Let's get to our Twitter question of the day now. We we just talked about the 60 40 portfolio. Citadel's Ken Griffin telling me hours so ago it looks much better today than it has in recent times. Do you agree? Head to at CNBC overtime on Twitter. Cast your vote. We'll share the results coming up later on in the show. And we're just getting started, though. Right here in overtime. Up next, the big report on Apple production that sent that stock tumbling today. Star analyst Dan Ives is standing by to break down the fallout.

We're live from Delivering Alpha OT right back. All right, we're back in overtime. Apple sitting out today's rally on a report the company no longer plans to ramp up production of its new iPhone. Joining us now is Wedbush analyst Dan Ives. He has an outperformed rating on Apple. $220 is the price target. Josh Brown is still with me. What do you make of this report? True, not?

What does it mean? I mean, I think, you know, we've talked about it with you. iPhone Pro, the mix is heavy, 85%, 90%. And a year ago, that was 65%. So I think a lot of this is really more glass half empty in terms of what's happening on iPhone 14 base model. The street's focused on the Pro. The Pro continues to be, I believe, 8% to 10% higher than a year ago. And that's why I believe, you know believe this was an opportunity to buy this stock. I still think that they beat

numbers despite some of these reports. But I mean, if they're not allegedly going to increase production, it sort of flies in the face, does it not, of a belief by you and others that there's going to be this super refresh cycle all through the system because of these new models, pro or base model? Look, I think at first glance, and you saw the reaction last night in terms of what this news was. But as I handheld investors through, I think when you go through the math, the mix shift on pro is jaw dropping. I mean, like I said, 85 to 90 percent. That's significant for ASPs. And I think production, what Apple's essentially doing is swapping to more pro models before they overall increase production. The base, no doubt it's been underwhelming, but I believe the street starts to understand the message.

It's all about the pro. That's the key for ASPs and revenues going forward, which is why I thought this report, in my opinion, sort of a glass half empty rather than telling the whole story. Why should I believe that the so-called last general standing, if you want to put it that way, in terms of these mega cap tech stocks, right? Microsoft has gotten hammered. We know about some of the other ones too why should i believe that apple its moment is about to happen on the battlefield it's going to get taken out it's just a matter of when and maybe these are the first steps sure and i think it was viewed okay now the golden child apple now they get thrown out and another sort of victim of the market i mean scott what i just continue to point to is fundamentally

what's happening with our checks i mean mean, enterprise cloud story with Microsoft, there's still a third of the way through that. And I think that's one overly negative in terms of whisper expectations from Microsoft going into the next year. Multiples already contracted significantly. And then I look at a name like Apple, it comes down to 240 million iPhone time and upgrading three and a half years. That's going to continue to flow through. And I think also the China story continues to be underestimated in terms of the valuation here. And that's why I believe this continues to sort of be rock and Gibraltar plays in tech, despite obviously a dark macro.

Hey, Dan, I look at every metric that you would follow Apple on, and it is more expensive than the median over the last five and 10 years. So just take a median trailing 12 months on anything you want, enterprise value to EBITDA, price to free cash flow, price sales, price earnings. It's not only not outperforming the S&P still this year minus 15 versus minus 21 but it's held its overvaluation relative to all of the other mega cap stocks so you know is is that outlook not truly in this valuation for me and I'm a shareholder it really does seem to Scott's point that the risk is to the downside, not the upside at this moment in time, especially if we think this isn't a blockbuster phone. Sure. And I think when you put those metrics together, I totally understand the point.

I think a lot of investors are there. I think where, you know, where we differ in terms of our view that this has basically become going forward. It's a sum of the parts in terms on the services business, the valuation you have to give $100 billion annual business growing in the low to mid teens versus what I would say is call it the last three years prior to that, the ultimate services business was valued $300 billion. I believe that's worth $1.3 to $1.5 trillion. So that's really our view. It's a sum of the parts and overall P.E. misses the underlying growth that's happening in Cupertino. That's fine, but that doesn't necessarily justify the P.E. being at 24 or 25 times when the overall multiple, the market itself is coming down yeah and scott's that point i think

like when i look at the growth of apple relative to which they just say broader s p when i could look at services what i believe is a massive pent-up demand on the iphone as well as just more and more products and more and more penetration coming forward i could argue that apple's growth could be double in terms of what a lot of other tech names, ultimately their growth prospects, especially in terms of large gap are going forward. So that's why I just think straight PE to look at Apple, I think misses the underlying growth story. And that's sort of been our view with Microsoft as well. And some of the cyber security names like Powell out there. All right. The table pounder, as you've called it.

All right, Dan Ives, thank you. Appreciate it very much. Thank you. For the viewers, very quickly. Apple's 50-day is on the verge of crossing below the 200-day, what you would call a death cross. And that seems to be a little bit of a battleground, that level 160. And so you'll be watching for that as

resistance overhead. All right. I'll see you again in a few for HTOT. Up next, $17 billion worth of investment advice from right here at Delivering Alpha. Hedge fund manager Tina Biles-Williams is joining us live. We'll find out how she's navigating these turbulent times. OT is right back. Welcome back. It's time for a CNBC News Update now with Shepard Smith. Hi, Scott. From the news on CNBC, here's what's happening. Hurricane Ian made landfall today, 3.05 Eastern Time this afternoon at Cuyahosta, a barrier island off Fort Myers in Cape Coral in Lee County on the southwest Florida coast. According to the National Hurricane Center, Ian came ashore as an extremely dangerous Category 4 storm with maximum sustained winds at landfall of 150 miles an hour.

It is one of the strongest storms ever to hit the continental United States. This is a live look in Fort Myers right downtown off the Caloosahatchee River there right in the path of the eye. Ian unleashing life threatening storm surge, catastrophic winds and flooding up and down the southwest Florida coast. And look at Naples south of landfall in Collier County. This is a driveway for a hotel that's just right off the Gulf of Mexico, where literally the Gulf came ashore and is flooding the region with saltwater. MSNBC's Ali Velchi is there. He reports waters are six to eight feet deep, with cars and furniture and refrigerators floating by. Tonight, complete coverage of Hurricane Ian. We're live in several locations along the Gulf Coast.

Plus, we'll hear from the hurricane hunters at NOAA and local officials from Naples and Collier County and up through Hillsborough and Pinellas counties in the Tampa area. Got it done on the news tonight, 7 Eastern, CNBC. Scott, deliver it. Deliver it. Yeah, big and important night. We'll be there. Shep, thank you. That's Shepard Smith. Stocks staging a rebound today after notching a new bear market low. So how is the big money navigating

the recent turmoil? Let's ask Tina Biles-Williams. She's the CEO and founder of Exponence, which oversees $17 billion in assets. It's great to see you here at Delivering Alpha. Thanks for being here. Yeah. So you've got a lot of opinions today on where we are. Most of them gloomy. Do you share that view? Look, we have another down leg today was, you know, if you look at net short positions, they were extreme. And so this is not a surprising move. But, you know, there's been a lot of focus on valuations. And one of the things that I encourage people to do is to extract for the FAANG stocks and to get sort of a more sort of gravitationally appropriate view of multiples. And with that, you're at about 13 times earnings. And I don't, you know, when you look at prior bear markets, that is not too far outside of the range of the bottom.

You said another down leg. I mean, you feel like stocks need to take another down leg or they likely will? And to what degree? Well, markets are adjusting, in my opinion, to a new normal, right? In that this is an environment we haven't seen in 30 years. And so, you know, and so the Fed is adjusting to a new normal. That's for sure. Better late than never. People are trying to even understand the reaction function of the Fed. So there's just a great deal of uncertainty.

Earnings probably have a 10% or so drop to come. So I wouldn't be surprised if we don't have another sort of final. If that's your view, how does your portfolio look right now? What's your positioning looking like these days? Defensive. We're pretty defensive both in our fixed income portfolios and our equity portfolios. The idea of, you mentioned fixed income versus equities, this 60-40 portfolio question,

which we discussed with Ken Griffin, where some say it's dead, he suggested far from it, given where yields are and some of the opportunities that exist in fixed income. Do you see better opportunity in bonds than stocks? You know, I'm gonna quote my bond manager. He said, if you liked me in 2021, you ought to love me today, right? And so, you know, from a pure valuation perspective, it's a better time. Now, if you ask me structurally whether sort of a passive

60-40 portfolio is the best way to go. I don't know. I think... You have your doubts? Well, you know, for an institution, that's... I'm also thinking about, you know, our retail component of our viewership that has been brought up believing that that's the way to go and that will be from here to eternity.

Well, one of the challenges of an inflationary environment where you have inflation volatility is that bonds don't do as great to diversify against equity beta risk. Real assets, this is harder to access on a retail level, but things like global macro that can sort of better negotiate the macro and geopolitical volatility that we expect. Great having you here. One of the joys of delivering Alpha is getting to meet and talk to new people in our universe. Welcome. We hope to have you back. I look forward to being back.

All right. That's Tina Biles-Williams. Again, exponents, the CEO, $17 billion under management. Up next, we're breaking down today's big rally in Netflix. Josh Brown mentioned it. He's in that stock. He's coming back to give his take on today's move. And don't forget, you can catch us on the go following the Closing Bell podcast on your favorite podcast app, Overtime. We'll be right back.

We're back in Overtime. Check out today's move in overtime. Check out today's move in Netflix. That stock rallying more than 9% following a big upgrade at Atlantic Equities. The firm is bullish on the company's upcoming ad-supported model, saying it can boost the stock by 26%. Josh recently bought Netflix, rejoins us now as a double upgrade. Yeah. And the stock's gone from $162 to $245. five now it was at seven hundred dollars yeah before you don't trigger don't trigger why is it out where the stock trigger a lot of people yeah i'm gonna get his permission if i if i could take a profit in this eventually because it's having a really really good day

and i think what's interesting about netflix is you know facebook is like this fallen angel. It's this former advertising darling. And now so much about the trends within advertising on Facebook currently in doubt, like does the new iOS agreement that they have to adhere to, does that hamper their ability in Europe, in Asia, what happens to the United States? Netflix doesn't have that problem. And you could make the argument that they have the potential to do what Amazon did, which is come out of nowhere and instantly be a highly relevant, high octane advertising platform for the Fortune 500 and beyond. Amazon was able to become the third largest advertising platform in like a year. Now think about Netflix. Think about the viewer base. So they are themselves estimating

that as many as 40 million people might be ad-supported Netflix users by the end of next year. And that sounds to me like they could even be sandbagging. It could be way bigger. So that all of a sudden makes this a highly relevant player in a huge space that historically has been basically a duopoly between Google and Facebook. Now Amazon has joined, and now Netflix. And I'm very hopeful that this could be the thing that puts a bottom in for this company's share price. I mean, that's one heck of a move. More than 9% in a day.

Dude, how many fangs are green on the month of September? I think it's zero. Well, you saw the performance in the month is, what is it, up 9.5 percent, if not more, in the month of September relative to what the NASDAQ has done and the S&P 500. More importantly, you have this new growth story and this concrete catalyst coming up at the end of this year. You have people starting to think about Netflix as recession-proof.

An ad-supported Netflix tier could actually be recession-proof. It's not that no one will cancel the service. It's that very few people who are paying almost nothing will even bother. That's a new leg to the story, and this is a 20 multiple on earnings. When you talk about when this stock was $700, it was triple the valuation. It was a 63 multiple. So not only is the story starting to get better, but you're paying only about a third of the valuation that you were being asked to pay 18 months ago. To me, that's a really interesting situation. All right. We'll see you back again with us in just a few. That's Josh Brown.

Still ahead, we're tracking the biggest movers in overtime. Courtney Reagan is standing by with that for us today. Hey, Court. Hey, Scott. Skiing, a utility, and a bank. What do they all have in common?

Well, they're all moving on earnings. I've got the details for each one coming up on Overtime. Time to track the biggest movers in OT. Courtney Reagan is standing by for us today. Hi, Courtney. Hi, Scott. So Vail Resorts putting up a smaller loss than expected

thanks to strong demand at its Australian resorts as North America sites continue to recover from the pandemic. Past sales for the upcoming North American ski season are up 6% in units, 4% in sales compared to last year. The leisure company, quote, expects meaningful growth for fiscal 2023 relative to fiscal 2022. Shares of MTN up about 2%. Shares up about 1% for Jeffries Financial. Earnings and revenue coming in stronger than expected, though, below last year thanks to a sharp drop in investment banking revenue. And finally, check out PG&E, the energy utility that provides service to much of California, up better than 1%. That company said in a filing it's seeking approval

to sell up to 49.9% of a non-nuclear unit. This would be separated into a standalone utility. The company also reaffirming fiscal 2022 earnings guidance. Those are your overtime movers. Scott, back on over to you. All right, Courtney Reagan, thank you very much. Coming up next, the one big money manager here at Delivering Alpha that says growth has been replaced in the recent market downturn. The details are next. We're back in overtime live from CNBC's Delivering Alpha conference.

Leslie Picker is here with us on set with some of today's big highlights in which she has made many. You've been burning it up today out here. You too, Scott. But the afternoon in particular, those sessions comprised several private equity panels, giving us an opportunity to really dig into the dealmaking market, the IPO market, and how portfolio companies are hunkering down amid all of the uncertainty right now. I had the opportunity to sit down with Orlando Bravo of Toma Bravo and Bill Ford of General Atlantic. They both predicted a wave of consolidation as tech companies look to scale up to conserve cash amid a more challenging fundraising cycle. Exits, too, have effectively been dormant.

Ford said that it may be several years before we really see a constructive IPO market. In the meantime, Ford said he's urging his portfolio companies to focus on the bottom line. I think the days of just revenue multiples are over and it's going to be people trying to make judgments about long-term profitability and long-term sustainable growth. That's a lot healthier market. Growth has been repriced in the public market downward. That is just filtering its way through the private market and it's going to take some time for entrepreneurs to accept the fact that growth is priced differently. Blackstone President John Gray echoing a similar idea, saying that he's telling management teams that in this difficult capital market environment

that they need to be much more thoughtful strategically about employment and investment, Scott. So it's kind of different from what we're used to seeing with growth. It was all about the top line. And if you had a bottom line, it was like, what are you doing? Why are you profitable? Why not grow your TAM? Why not grow your total addressable market? Josh, you know, from the conversations that we've had over the last 18 months to two years, at one point in time, and it was emblematic of the times, growth at any price was the story. No one cared. There was a watershed moment, probably 2015, where Fortune did the first unicorn cover, and that term made its way into the public lexicon. And I think they mentioned there were maybe 100 companies with over a billion dollar valuation in the private market,

and that soon became 100x of that. And I think what's really interesting is, you've had such amazing returns in the private markets, especially venture, that it became common to overpay just to be in on deals. And none of that, of course, is long-term healthy. So I think if you're an operator in that space, you're looking at a lot of new players who set up their own venture funds, set up their own angel funds. You want them out. The incumbent funds that have been through several cycles, they're probably going to do very well here because they've seen this movie before. They know how to get to the end credits. So I think it's interesting to listen to veterans, just, you know, what they see playing out. And many of them, of course, had already predicted it.

Yeah. I asked Ken Griffin about, you know, how we're going to look back at this period of time of NFTs and SPACs. And he threw crypto into the mix himself and suggested to no one's big surprise that it's all a byproduct of the amount of money that was just flying around. Not only via the Fed, not only via the Fed. Well, they want to, you know, they'll play the game that's being played. Right. And try and play it the best. And they've had a great year, by the way, better than most. They're one of the top-performing hedge funds. But the idea that this whole thing was fueled by all of this money,

monetary and fiscal, that was being thrown around, and you're not going to see anything like that again for a while because the game's changed. Yeah, until we all forget. Like we always do, but... And the central banks are back to easing, and then it'll be the next thing. And, you know, we'll see it replay itself.

The players will be different. The stocks will be different. The concepts will be different. The behavior won't change one bit because people don't change. Now, this is a moment in time, but one common thread we did here today was just this idea from these luminary investors that they believe that the Fed made a mistake.

They did not hold any punches here when it came to their criticism of the Fed and just the asset inflation, core inflation, and so forth, and how we got here. And the question of what do they do from here, right which I think really has as I said to to Mr. Griffin the issues percolated over I think of of late of whether they've done too much whether they should stop you know last week it was Jeremy Siegel saying you they're crazy they've done too much Ken Griffin saying no keep going you got to get inflation not only under control but make sure that it's not ingrained into the system. Biggest surprise you got today? It couldn't have been the level of negativity, because generally

speaking, when you get this collection and group of big wealth managers together, they tend to be worried about when it's going to start raining hard. Exactly. No, I wasn't surprised by the negativity. There were some pretty bold calls, though, and it seemed like there was this consensus that if there is a hard landing, it's taking place in 2023. And most people were pretty set on this idea that there is, which seems to be slightly different from what we hear from strategists, where it's more of a coin flip. You know, is it going to be a hard landing? Is it not? These guys were more in the kind of like 75 percent chance of a hard landing camp. If you read between the tone and the tea leaves and things like that, they were much more assertive on this idea that 2023, we could be in for some pain. And there is this lag until we get there due to all the stimulus that's gone into the system,

but it is still coming. So don't get too comfortable. Yeah. Great job today. Thank you. Delivering Alva doesn't happen without Leslie Picker. Works he did all day today. Josh, thank you, too. It's great having you here. Great event. Up next, it said Tully's last word. We're back in two minutes.

Welcome back to Overtime to the results now of our Twitter question of the day. We asked you if you agree with Ken Griffin that the 60-40 portfolio is an attractive allocation right now. Look at that. What a debate. 50-50, which means Mike Santoli has to settle the debate. He's here for his last word. What do you make of that? You know, Mike, we've talked about this and there is a good debate being had right now as to whether the 60-40 portfolio is dead. Ken Griffin said, absolutely not. Our voters are split. Yeah.

I mean, I actually think it's modestly encouraging that even half of the voters said that it's still alive because it has become, I think, a trope of this market that people want to kind of assume that because the 60-40 portfolio year-to-date has had like its worst nine-month start to a year in 90 years, that somehow it's indicative of what's going to happen in the future. But at the start of this year, the initial conditions were S&P 500 at 21 times forward earnings, having just had one of the greatest risk-adjusted two-year runs in history. And the 10-year Treasury yield, just as a proxy, was 1.5%. Well, right now, you're at 15.5 times forward earnings.

Maybe the earnings have to go down, but that's a better starting place. And, you know, 3.7, closer to 4% 10-year Treasury yields. The best indication of your likely return on a government bond is the yield that you buy it at. That's usually indicative of how it's going to be over the course of it. So there's a little more of a cushion. I'm on board with the idea that you're not going to get the really strong tailwind of a persistent, you know, drop in yields and a rally in bonds. But it does make sense that it's more more advantageous entry for that type of a portfolio than you had just nine months ago. Speaking of bonds, and you mentioned the 10-year treasury, you've seen a lot of markets.

You've seen a market in which the 10-year treasury yield falls by 30 basis points in less than 24 hours? There have been examples. I know it's got like a 3% up day on the long long term Treasury ETF that has happened only once every couple of years. But it's really much more an indication of how it had spiraled higher. And there was an embedded expectation in the pricing of all asset markets that things were going to spin out of control. So for one day anyway, central banks had a bit of sway over that. And you had really lopsided positioning. It's a little bit of a shock to anybody who was leaning against it. And you do have that

richness of yields that people were increasingly willing to lock in. But it also does show one other thing that you and I spoke about into late last week, which is you have a lot more people saying, oh, at least you're getting paid to hold some short-term fixed income paper. But the kind of scenario where yields go down is also, at least initially, going to be relatively friendly for stocks because that's been one of the main pressure points. Yeah, well, we'll see if it's more than a one-day phenomenon, as you said. I mean, it's been a stunning, it was a stunning move up, and now it's been a stunning move down. The movement in the currency market certainly helped as well, taking a little bit of pressure off the strength in the dollar of late.

I'll see you tomorrow. That's Mike Santoli with his last word. That does it for us from Delivering Alpha. Fast monies now.