Closing Bell - Closing Bell Overtime: Where are stocks headed? Breaking news from the Fed 5/12/22

Episode Date: May 12, 2022

The Nasdaq Composite eked out gains into the close. Stephanie Link from Hightower says the playbook has changed, but opportunities remain. Plus, Anthony Scaramucci from SkyBridge Capital says despite the recent collapse in cryptocurrencies, he has not sold one crypto position. And, Joe Terranova from Virtus Investment Partners reacts to breaking news from Federal Reserve Chair Jerome Powell who says, “Executing a soft landing may be beyond our control.”

Welcome to Overtime, everybody. I'm Scott Watney. You just heard the bells. We're just getting started right here at Post 9 at the New York Stock Exchange. Coming up in just a little bit, I'll speak to Fundstrat's top technician, the man who says the market can't stabilize until a certain stock does. Nuveen's chief investment officer will also be here with what they are telling clients right now. Volatility continues to dominate the markets. We do begin, though, with our talk of the tape. The starts and stops of an attempted rally, another turn lower, sort of a comeback at the end and what all of it means for where your money might go from here. Let's ask Stephanie Link. She's Hightower's chief

investment strategist, a member of the Halftime Investment Committee and sitting right to my left here at Post 9 at the New York Stock Exchange. It's good to see you here. Great to be here. We tried many times today to get something going. We started to here at the end. Just give us your view of where we stand now. Exhausted? How's that? Yeah.

It is a sell the rally kind of a market. And this week in particular has been really disappointing, Scott, because we couldn't hold a game, right? And I think a lot of that has to do with the CPI and PPI numbers being less accommodative, right? Less peakish. And so I think that inflation is here longer, stronger, and I think that's kind of seeping into the markets as a result. And so tech is getting hit, growth is getting hit, because long-duration assets get hit, obviously, when higher inflation, higher rates. And tech is 35% of the S&P. Does it feel to you like the market wants to rally?

Or are all of these just false signs of hope about trying to get some kind of bounce back after all of the pain that we've felt? Well, maybe it wants to try, but it's not working. And that's because we have so many unknowns. We talk about this on Halftime all the time. The Fed is behind the curve. I don't know why Powell did what he did last week by saying no 75 basis points. They definitely need 75 basis points and then some. They're not even close to neutral right now. So they are behind the curve. And that's why I mentioned inflation. Inflation is still really hot. It may be peak, Scott. It may be, but it's going to stay higher and stronger for longer. And that's troublesome. Let's do this. Let's talk about some of the losses that we've seen and try and put everything into perspective for viewers.

I mean, I think that's a helpful thing to do. Jason Gepford on Twitter. I read an interesting tweet from him today, and I want to read it to you. Today, more than 29% of issues on the New York Stock Exchange have hit a 52-week low. On the NASDAQ, it's more than 33%. There have been only 18 similar days since 1984. The S&P 500 showed a loss a year later once for 0.2%. Its median return was plus 32%. Does that help us put all of this into perspective in any way if your time horizon is longer than five minutes or five days or even five weeks? Well, yes. If you're long term, it's very important. It's very interesting. But we're

in a different situation this year. The playbook has changed, right? Because you have such high inflation and there's just so much in terms of that we don't know. And so, look, you know I'm not a bear and I actually do not think we're going into a recession. You've been a buyer. You're looking for opportunities to buy. Yeah, I bought Diamondback yesterday because it was down and energy was up and that didn't make any sense to me. They're buying back a whole bunch of stock and that sort of thing. Yeah, I am a buyer, but I am trying to think long-term. But the things I'm buying, Scott, are different. It's quality. It's free cash flow stories.

It's a little bit more value. You know I am a little more value, but it's even more now, I think, at this point in time. But balance sheets are more important than ever right now. And it's not really, you don't want to go over your skis in terms of sectors either. You know I brought that in as well. So it's just kind of being a little more boring, but a little more

careful and purposeful. Boring. Well, I mean, if boring works, then so be it. Be boring. But I mean, you've added to IBM. You've added to a little bit to Meta. Bill Miller was on a little bit earlier talking about he thinks we might be close to an intermediate bottom in the market. So look, there are some who are looking for opportunities like you rather than running for the exits. Well, I mean, it's kind of interesting that Facebook and IBM traded the same multiple, pretty much. Only because Facebook's gotten cut in half. That's right. But I think also IBM is doing some pretty good things behind the scenes as well. But my point is they're trading at 13, 14 times earnings,

seven times EBITDA at Facebook, right? And IBM, they're doing all great things in terms of the cloud, and you get a 5% dividend yield. So, yeah, I am looking for opportunity and ideas. Not so much on new technology names so much as I am just adding to the ones that I already own, that I already like. All right, so let's talk about Apple. It is, look, it's the conversation of the day.

Earlier today, it broke below 140. The thought process being here that the market can't stabilize unless that stock does. I mean, it's so heavily owned. It may not be the largest anymore by market cap, but it's right there too. The stock tries to finish with somewhat of a rally. It closes a little north of 142. The importance of Apple to be able to declare that the worst is over is what? Oh, my gosh, I don't know, because I think right now it's the technicals that are taking over. It's not the fundamentals. So to me, this is a buy right here, right? And I think you don't want

to go all in, but you do want to buy a little bit in increments. this is a buy right here, right? And I think you don't want to go all in, but you do want to buy a little bit in increments. This is a dominant franchise, recurring revenue. By the way, I bet you anything they're in the market buying back their stock because they announced a $90 billion buyback. They buy back more than anybody. Right. And that should at least help set a floor of some sort, right? And I think it's a little bit more defensive by nature. So let them take it down. And that's your opportunity, especially, again, you're talking about long term. I looked at the 10Q. Their gross margins last quarter were the second best in 10 years. Second best. So they're doing all the right things. I think they're going to be just fine.

And you've got to take advantage of some of these kinds of things. If you're looking for any glimmers of anything that could maybe put a floor under where we are right now, it's this idea that buybacks could pick up in a big way, that the window has reopened. And companies, as you said, you know, CEOs like Tim Cook, CFOs are taking a look at their slide in their stocks. And I could go down the list of so many that have gotten so ugly that they present an opportunity for at least somebody's going to buy it. It's going to be the company itself. I think so. And even my ugly GE, they're buying back. And Larry Culp, the CEO, is buying back stock.

So they see value. We have to look for value. It's a fundamental driven market right in my mind, looking at companies that have good balance sheets, good market share. They are delivering. And if their stock goes down, that's an opportunity. It's the ones that miss that you want to try to avoid. All right.

Now, I've got to bring up a name that you're probably not going to be happy that I did, and it's Boeing. Okay? Jim Cramer sells out of Boeing completely. He was critical after the last earnings report. He's been critical of Calhoun, the CEO. And now for the investment club, which I hope all of you will join, says enough is enough, and he's totally out.

So there are opportunities to get out of stories that have gotten bad. Are you doing or thinking of doing the same? Not on Boeing. No, it's down so much right now. And all they really need to do is get the 787 deliveries back going again and the 737 MAX, just more momentum. And then you have the China recertification that is going to come. It's just a matter of when. And I just think all of those things means that their free cash flow can go higher going forward. So it's painful. It's ugly. By the way, so is GE because they're tied directly together, right?

But I'm sticking with both of them because I do see long-term value. I wonder how you're thinking about this whole idea. I've spoken with you about all of these quote-unquote turnaround stories, whether it's GE or IBM or Boeing. And I wonder if the psychology, and this is not just for you, this is for anybody out there watching, if the psychology becomes different about the willingness to wait for a turnaround story in a market that has gotten so much more uncertain. Yeah, look, I mean, restructurings take a very long time. Come sometimes as a couple of years, but I think that the reward is a good one if you get it right.

I mean, it may just take some time. So you have to stay patient. You have to do your due diligence. You have to listen to what companies are saying. If the macro changes, that's one thing. If the micro changes, if something really fundamentally changes at any of these companies, well, then you reassess, right? Well, but the macro can affect the micro. If something really fundamentally changes at any of these companies, well, then you reassess.

Well, but the macro can affect the micro. And it feels like we're in what could potentially be a turning point for the macro that could certainly impact stocks like those. Well, I'll tell you what. I mean, I talked to GE management most recently, and they are saying the demand is off the charts. The only thing I worry about for them is their health care. Hang on two seconds. Affirm is out with earnings. Kate Rooney has it.

What do we know? Hey, Scott. looks like a pretty significant beat here on the top and bottom line for Affirm. Let's start with the loss per share, 19 cents. This number was a loss. Wall Street was expecting a 51 cent loss, so a lot better than expected there on earnings or EPS. Revenue, 355 million versus 343 million. The street was expecting that grew 54% year over year. And then gross merchandise volume, this is a key line item for Affirm, that grew 73% year over year to $3.9 billion. Max Lefchin saying here in the release, the merchants on the platform grew from 12,000 to 207,000 year over year, likely due to its partnership with Amazon and Shopify there. Shares here up more than 17 percent after hours, but again, a firm

with a beat in its fiscal third quarter. Back to you. But let's be honest. I mean, the stock's down right going into the number like 83 percent. So I don't know if the bar was low. And then the big question, Kate, becomes really what you look at going forward. Right. Whether these kinds of stocks, the buy now and pay later, are going to see defaults if the consumer weakens and the environment itself gets weaker, too. I think we need to see what the guide is and we need to hear the call. We're still looking through it for the guidance. That's going to be big.

And then whatever Max Levchin says in the call about the health of the consumer, we've heard it. It's sort of different when you hear PayPal versus Block. Some have said inflation is really hitting the consumer on the PayPal side. Companies like Block have said it's actually not. And then the credit card companies have said it's not. But you look at some of the lending names out there, like Upstart, these names have really gotten hammered. And like you mentioned, stocks up more than 18%, but nowhere near wiping away its losses for the year. Going into this, it was down something like 80% so far this year. So a little bit of a relief rally here, but we'll still look at the numbers and get back to you here, Scott.

All right, we'll pop you on. You got something, you let us know. We'll have you in the OT, I hope. These stocks, Upstart, smoked. You hope that buy now, pay later doesn't become buy now, pay never. And in a very uncertain environment, maybe we're not there yet. Maybe we go into something like that. What do you do with stocks like this? By the way, I should also say that Kramer sold some PayPal, too. Did he really? Yes, he did. I did not know that. He sold some PayPal.

I don't know relative to the overall size of his position there, but he sold some PayPal. Yeah, this group is non-touch, no touch whatsoever. This one's not even making earnings, right? They're still losing money, and this is the kind of environment that you don't want to own companies like this. You don't want to own price-to-sales companies. But I think their business models certainly are at risk. Credit is at risk. I would much rather take advantage of the American Express downgrade today.

It was down 4%. It was down 4%. It was down 4%. They're going to handle things much, much better. And no question in my mind. And they have earnings. And the stock is cheap. And they are buying back a ton of stocks. So no touch on these names.

Forgive me for cutting you off earlier, too. Got to get to the numbers because things are fast moving. Let's expand the conversation, too. Dan Greenhouse is with us. He's the chief strategist at Solus Asset Management. Malcolm Etheridge is CIC Wealth Executive Vice President. Steph, of course, is still with us. Malcolm, I turn to you first. Your view on the markets right now is what? I actually agree with Stephanie in the sense that, you know, with names like

a Google and a Microsoft on top of Apple, you guys were just discussing all being down over 20% year to date. I would say this thing is contagion that spread to those kind of names, right? Those are all still very good quality names that have enterprise contracts, government contracts, all stretching out over the next five, 10 years. These are quality companies that are being thrown out with the bathwater in these major indexes. And that's what's actually hurting those kinds of names. And so I would be looking for the quality like she's talking about here. Does that make you feel better or worse? I could paint two sides of that story, right? I could say,

OK, these are the quality names that are getting thrown out. Maybe that's an opportunity to buy them. But the mere fact that they are getting thrown out means now they've come for them. And now I'm worried because if they've come for them, that was the last leg in the stool. Well, if your concern is we're going to keep on selling off, right, do we really expect the name like a Google again that I just gave you or an Apple? Like you guys said that, you know, two months ago people were joking that Apple had become its own asset class. Do we really expect that Apple's going to have an 80% sell-off the same way in a firm has, you know, by the end of this

negative market cycle? I doubt it, right? Obviously, we can never call that and make any guarantees there, but I doubt it, right? And so I think if I am saying I want to be a player in this market, I'm going to put my faith in companies that are returning capital to shareholders, whether it's through buybacks like you're talking about or dividends or something similar like some maybe M&A activity on the horizon. And with Goldman Sachs note that came out earlier in the year that they expect a trillion dollars in buybacks, you better believe that with 35% of the S&P being in those tech names, a lot of those buybacks are going to come in those same large cap tech companies that we were just discussing.

Dan Greenhouse, are we close to a bottom? Do you feel from what you've seen in some of the price action that we're ready to make a move or do we still have to work some stuff out? Well, I mean, admittedly for the viewers, I thought that a week or two ago, and obviously that hasn't been the case. I mean, Stephanie made a good point about this not being the type of market where you want to own price-to-sales type companies. And I think more than anything else, that's the heart of the matter right now, that when you're dealing with a sell-off in those types of companies, there's no way to know whether 40 times revenues is the new normal or 30 times revenues or 20 times revenues. The selling has to exhaust itself. And it's pretty clear right now that despite a number of items to which we could point,

oversold conditions, the percentage of the market below moving averages, all those sorts of things that we look at, there still seems to be no end to the selling. So, no, I can't say whether we're at the bottom or not. I mean, you know, we still have people talking about VIX hasn't gone high enough. You haven't had the historically obvious, if you want to use that word, signs that the worst is over. Not that it needs to play out the same way it has every single time in the past. As you said, this time's different. Every time is different in some respects than the prior bit,

whether it's up or down. What do you make of what they said? But the problem is that we are not going to get any resolution on the Fed. We're not going to get a resolution if they can soft land. And we know they probably can't, right? We're not going to get a resolution on inflation. Okay, fine, we talked about peak inflation. I know Jim Laventhal talks about it all the time. I hope he's right and that we are peaking, but we're going to stay high,

and that's going to be disturbing for investors every month when the data comes out to see that there's little progress being made. So, to me, it's remarkable that we've seen 10% earnings growth in the first quarter. It's remarkable. And, Steph, let me just jump in. Yeah, go ahead.

I'm sorry, just about the peak inflation point that Jim's hitting on and you're noting, I would just remind people if they haven't seen, gasoline prices are now hitting a new high again. They came off a little bit and they're spiking again. There's still the supply chain issues that companies are calling out, not being cleared away anytime soon. A couple of the semiconductor companies,

Stephanie, that I know you follow, have mentioned that they don't see any abatement in the near term. Listen, inflation is going to come down on a year-over-year rate, but at that month-over-month rate, if it continues to look like it did last month, you're going to hear more from the Mary Daly's of the world that you just did. You're going to hear more of that in the future than people think. And just watch rents, right? Rents are going to go a lot higher from here. Wages remain really high. There's a lot of sticky parts of inflation. So that's the problem. That's the reason why it

is different this time. We haven't been through this in a very long time. The issue that we haven't discussed yet that I want to get a comment from everybody is not something that's inflating, it's deflating. And that is Bitcoin and crypto. And I'm wondering, Malcolm, how you view what's happening in the crypto market, the crash, the carnage, whatever word you want to put with it. How worried you might be about the overall market, broader risks, the wipeout of $800 billion of wealth in a month, and the type of people who may be losing that money. How concerned are you?

Yeah, I think the folks who were super bullish on Bitcoin, you know, call it 2020, 2021, who we were all coming on this network and giving the warning, this is not a normal market cycle. I think they've probably traded in tandem with the price of Robinhood, right? The share price of Robinhood to this point. And a lot of those people you're talking about are out of those positions, which is why a Coinbase is down significantly, like you guys just had on the screen, or Bitcoin is down significantly, because Bitcoin has proven to us time and time again now through this whole cycle, especially since Russia invaded Ukraine. Bitcoin is not the guard against inflation or the safe asset class that we're told to think about it as when times get rough.

We're told that gold is a safe haven asset when times get rough. And what happens as soon as a war breaks out in Europe, its price spikes through the roof. Bitcoin, on the other hand, has been choppy and has been selling off all through this entire thing. So inflation is up, the market's selling off, Bitcoin's selling off right along with it. And so I would think about it more in the camp of something like a high yield bond than I would necessarily a safe haven asset at this point. I could tell you, Dan Greenhouse, I mean, you know the type of investors that I talk to on a regular basis, and I can tell you that some are concerned. And they look at what's happening and the destruction of wealth of an age class of,

say, 25 to 34. Hopefully, that's not generalizing too much, although admittedly, I know it is generalizing to some respects. And what that destruction of wealth ultimately means, when you have that much wealth destroyed from any asset class, any asset class in that short period of time, it's usually not the last you heard of it. Yeah, no, that's right. But let me just add about the high yield bond comments, since that's a lot of what we do. High yield at least is yielding seven and a half percent right now. So, you know, you might be taking a similar risk, but at least in high yield, you're going to get paid something. But that aside, Scott, to your point about the type of investor, with the stipulated, the obvious stipulation that anybody losing money, I guess, is a bad thing. I've been there for sure. reminiscent of what we experienced in the 2000s when those of us that came out of college in the

late 1990s were completely wiped out by our positions in Lucent and Sun Microsystems and the like. And there was, I imagine, a similar worry that the type of investor who were day trading or investing in these higher growth companies that subsequently were destroyed, all those worries proved to be nothing. The earth continued spinning. The financial markets continued operating. And we exist here on earth today as a result of it. I imagine when this moment in time passes, we'll look back on it similarly as we do other such instances. We'll find out. We got to leave it there. Dan Greenhouse, I appreciate your time very much. Malcolm Etheridge, I know we'll talk to you again soon. It's great to see you right here at Post 9, Steph.

That's Stephanie Link joining us right here at Post 9. Let's get to our Twitter question of the day. We ran a screen of stocks that have lost more than half of their value since hitting 52-week highs. We want to know from you, which looks most attractive right now? Is it Netflix, Moderna, PayPal? We just talked about that. Boeing as well. We mentioned Jim Cramer selling out of Boeing. What do you think about it here? Head to at CNBC Overtime. Cast your vote.

We'll bring you the results when we come back. Up next, much more on the crypto carnage in today's session. SkyBridge Capital's Anthony Scaramucci. He's all in on that trade. So we'll find out what he is telling SkyBridge clients. What are they doing? We'll find out in two. We're back in overtime. The crypto crash has wiped out about $800 billion from that market in little more than a month. It's a stunning decline that has some now questioning whether it's a trustworthy asset class. Our next guest is one of the space's biggest evangelists. Anthony Scaramucci, the founder and managing partner at SkyBridge Capital, joins us now. He's also, of course, a CNBC contributor. Anthony, it's good to see you.

I mean, I'm not really overstating it. You've hitched your wagon to crypto. Yeah, and I'll give you a comparison. In March of 2020, Scott, when Bitcoin got down to about between $4,000 and $6,000, There was 70 billion dollars lost. And so just think of the magnitude of what we're talking about now. It's an 800 billion dollar correction. But I think the good news about that, frankly, is because this is decentralized, you don't have any systemic risk. Secretary Yellen more or less said that this morning. And I just want you to imagine that kind of hit to the banking community, how dramatic that would be and what the Federal Reserve would need to do. So it's just an example of decentralization being what I would describe as less fragile than the

core system. Now, having said that, this is... Go ahead. Let me just interrupt you and I apologize, but unless we should be looking at it differently and the way in which some of the investors that I've been speaking with have characterized it, yes, the banking system may not be the place where the pain is most acute. It may be on the everyday person sector, if you will. People who piled into crypto, they listened to all the evangelists on it. A lot of retail, younger retail investors, and have had a tremendous amount of wealth wiped out as a result of the carnage that we've witnessed. And some of the people that I talked to are among the smartest I've ever spoken with. They don't know what to

make of that and what that means in the biggest picture. Well, look, of course, we can draw historical context back to March of 2000, where we saw the Nasdaq go from something like 5,000 and change down to 2,300. And so if you had leverage in this situation, then you'd likely incurred a permanent capital loss. But if you didn't have leverage in this situation, there were some anomalies that took place, like the Terra debacle, where I think these assets are at distress level prices. They're technically oversold.

And so we haven't sold one position, frankly. You know, still our core fund has about 18% exposure to Bitcoin and Ethereum. And I'll just point out to people, if you bought this stuff when we did back in October of 2020, these coins were trading 18,000 or so for Bitcoin, 700 or so for Ethereum. And so if you take a long term perspective and sort of zoom out, you could do very, very well in the cryptocurrency markets. Listen, everybody's a short-term investor when you have losses like this. You know, that cliche, I'm a long-term investor, Scott, until I have short-term losses.

And so I understand the panic in the markets. But what I would encourage people to think about is the two core protocols, Bitcoin and Ethereum. Zoom out, take a look at what they've done over a five-year period of time, and recognize that there was a flaw in the Terra Luna mechanisms. Many people spoke out against this. SkyBridge never owned any of those tokens. And many people spoke out against that. And, of course, when that crumbled, you saw massive selling pressure.

So I think this thing is technically oversold. We're long-term optimistic. And, unfortunately for me, Scott, I'm getting old. This is my eighth bear market cycle. And I just want to encourage younger people that are tuning in, perhaps it's their first or second bear market cycle, to see through the carnage and recognize that there's an extraordinary opportunity ahead like there was in March of 2000. Well, let me ask you this then, on the ability to see through the carnage that we've witnessed here, you're just coming off of a conference that you threw with FTX down in the Bahamas. And I'm thinking more generally speaking, of course, celebrities all over crypto and Bitcoin, commercials, movie stars, arenas with the name.

You look up, there's commercials about one crypto enterprise or another seemingly every five minutes. Do you think there's been too much hype around crypto in general and that this subsequent crash has really damaged credibility? Again, we could talk about Web1 in that same vein. If you remember all the stadiums that were named in the Pets.com Super Bowl ad, what I would say to you, Scott,

is yes, a portion of this thing has been overhyped. And that's because there's great excitement about the de-layering mechanisms that the blockchain technology represents. And so there will be things that fizzle out. Remember, Pets.com went out of business, but it was a great idea. And Chewy took the idea and took it over. eTaxi went out of business, but Uber became a colossal company. So to me, I think when you have a market weakness like this, you're going to clean out sort of the weaker performers, the poor fundamental things. But the sturdy things, the best protocols, I think are very well positioned. So one thing, since you mentioned

Crypto Bahamas, when I left there, we had over 2100 people two weeks ago. My colleagues and I, we turned to each other. If you think about the billions of dollars of capital, the swath of intellectual capital that's gone into the system, us being free market capitalists, you know, maybe that entire group of people is wrong, but I doubt it. It feels like the same sort of wave that you and I witnessed 20 years ago. And so when you're putting that much capital in the game and you saw what Andreessen Horowitz did today with another venture capital backing of a Bitcoin payment system, to me, the future is upon us. But unfortunately, the future always comes with these boom bust cycles, fear, uncertainty and doubt.

And, you know, I'm old enough to remember when Amazon dropped 80 or 90 percent and Barron's put Jeff Bezos on the cover and said Amazon dot bomb. And the age of this Internet retailer is behind us. Scott, he shot himself into outer space in his own rocket. And a few weeks later, he took Captain Kirk up with him. So I want to encourage people to think about this stuff very, very long term. It's still an early adoption story. You had a guest on earlier that linked it to high yield debt. And I definitely have never said that it's an inflation hedge. I've never said that it's a, quote unquote, safe asset.

What I have said is that others have. They have. But I'm not on your edge. What I have said. Others have. Others have. They have. They've got an inflation hedge, digital. I know. Did not you. Inflation hedge. I never say that. Old store of value. I mean, I could think of a million different things that the evangelists, the most hardened ones, have suggested to viewers on this network, certainly, and in other venues. Listen, and I push back on all that stuff. This has about two and a half, three percent adoption. Maybe that's thinned out slightly as a result of the bear market, but it is an emerging technological asset. It has terrific possibilities and terrific potential. But until you get to a billion or a billion and a half wallets, you really can't say that it's digital gold or store of value. What you can say

is that these protocols are set up so that people can operate peer to peer and they can de-layer the society. They can make the society more cost effective, more cost efficient, which is ultimately deflationary. And those protocols are being built right now. Let me just say this, Scott, if this was 1998 and you and I were dialing up the Internet and waiting 35 seconds for our AOL page to load, we wouldn't have imagined 25 years later that billions of people are streaming 4K video around the world on that same internet. And so I just want people to imagine the future over the next three, five, and 10 years. And I think this is going to be awesome. In the next three or four years at our

restaurant, the Hunt and Fish Club, you'll be able to go in with your smart wallet and you'll be able to transfer value to the waiter right there. And you'll be bypassing payment systems that charge anywhere from two and a half to three and a half percent. And I think that's going to be amazing cost savings for people down the road. Think of the future as a major delayering mechanism. And you'll want to own these things for the long term. We're going to we're going to see what happens. I think the headline is going to end up being that you haven't sold a single crypto position. And I think they say that that's hodling. And that's what you're doing.

Yeah, well, it's definitely hodling. But there's also some tire tracks over my forehead, which I've done a good job of covering up with makeup. I appreciate you coming on and talking about it. Anthony Scaramucci, we'll talk to you soon. It's time for a CNBC News Update with Shepard Smith. Hey, Shep. Mooch in the makeup. Hi, Scott.

From the news on CNBC, here's what's happening now. For the first time, the January 6th committee has subpoenaed sitting members of Congress. They're seeking testimony from five GOP lawmakers, including the minority leader Kevin McCarthy. He's seen as a crucial witness. Leader McCarthy says he spoke with then-President Trump on the phone as the deadly ins, Kevin McCarthy. He's seen as a crucial witness. Leader McCarthy says he spoke with then President Trump on the phone as the deadly insurrection unfolded. A wildfire now forcing hundreds of people out of their homes in the Southern California town of Laguna Niguel. Ocean winds fanning the flames as they charge up bone dry hillsides. At least 20 homes and

mansions destroyed. An Orange County fire official says they're monitoring hotspots today. More than 900 homes still under evacuation orders. And for the first time in U.S. history, a woman will lead one of the branches of the U.S. military, Admiral Linda Fagan, confirmed by the Senate to be the commandant of the Coast Guard. Tonight, the latest on the wild market moves, Russia's threat to Finland and Sweden over joining NATO, and the growing trend of retirees returning to work.

On the news, right after Jim Cramer, 7 Eastern, CNBC. Scott, back to you. Good stuff, Shepard Smith. Thank you so much. Up next, making the case for growth. Nuveen CIO, Sariya Malik, is talking about where investors can find opportunity as stocks continue to tumble. And later, the double downgrade that sent a pair of auto stocks skidding today. Overtime is back in just two minutes.

Robinhood's on the move in the OT. Kate Rooney is back with us to tell us why. Hey, Scott. We're getting an FCC filing out shares of Robinhood up about 12 percent after a firm associated with FTX CEO. That is a cryptocurrency exchange. Sam Bankman Freed here, the CEO of that company, taking a 7.6 percent stake in Robinhood. The firm here is called Emergent Fidelity Technologies. Technology. Sam Bankman-Fried, the sole director and majority owner of that company, again, buying about 56,000 shares of Robinhood, representing a 6.7 percent ownership, not the largest shareholder, still behind NEA and Index Ventures, but puts Sam Bankman-Fried above Cathie Wood and ARK Invest. Again, shares of Robinhood on the move up more than 21 percent on this news.

Scott, back to you. Let's be honest, though. I mean, Kate, this comes at a position of weakness for Robinhood, right? I mean, the stock is, I don't know if you remember what it was, but it's come down. It was like $8 stock before this kind of move. Talk to me a little bit about that. I mean, the position that this company has been in has not been good. There have been a ton of rumors about people coming in and either buying an activist position, a majority position. There's been rumors about some of the brokerage firms coming in, a bank potentially buying Robinhood, and the position of weakness that the brokerage firm has been in at this point. So I think a move like this was expected.

Sam Bankman-Fried, though, controls and owns one of the biggest cryptocurrency exchanges. Robinhood also, for context, looking a lot more like a crypto exchange and doing a lot in that business. So it begs the question of sort of what Sam's plans are here and why buy a stake in a competitor in this in this case. Yeah. Very interesting news. Kay Rooney, thank you so much. And it was eighty five dollars from eighty five to eight. Getting a move off this, as you saw there, we'll continue to follow that story. We do have breaking news right now out of the Fed. Chair Jay Powell is speaking with NPR, repeating that 50 basis points at the next two meetings is appropriate. Let's bring in now Sarah Malik. She's Nuveen chief investment officer. It's good to see you. Hi, Scott. You know, it's interesting

that we're getting these headlines from the Fed chair. Do you think they can pull it off? Do you think they can pull off a soft landing? I think there's a good chance they can. The market really is looking for two things to bottom, and that's easing inflation and also capitulation. It looks like we didn't see it this week. But if you look behind the numbers, we're seeing average hourly earnings that have peaked. Five-year inflation break-evens are declining. And the technicals are terrible. Sentiment is awful for investors. The put-call ratios are high. All of those are signs to us that actually we could be nearing a bottom. And there is a silver lining. And that's why we like select growth stocks, energy, and also stocks that provide some kind of income or dividend yield.

Yeah. So you like growth and mega cap because that seems to be now the epicenter, if you will, of the latest concerns about the state of stocks. We're looking at the 10 year. It's down about 40 basis points this week and economic growth is slowing. That is good for those companies that are less levered to economic growth. We're selective, though. You have to look for those companies in mega cap with pricing power, quality. We like Microsoft here, even Amazon. This has been a laggard since 2021. They had a poor quarter because they overinvested in capacity. That sets them up well for the long term.

Microsoft very well positioned with their enterprise and cloud businesses. But do you feel you've said maybe we're close to a bottom? Can we get there unless those stocks stabilize? I think we can get there even if these I think Amazon will stabilize before Microsoft. And I think we can get there. But what we really need to see is that sign of inflation easing and then some sign of capitulation. And we're starting to see early signs of that. Even today, people were coming in trying to cover their shorts. I think there's bottom fishing going on in the market. So we may be near a bottom right now. Yeah, it's interesting that we tried to get something going at multiple times today and just unsuccessful.

And it just speaks to where sentiment is right now. It's hard to have conviction much in any direction, perhaps. I mean, obviously, perhaps to the downside is leading the race. But we tried to get stuff going to the upside and just couldn't do it. Yeah, I think that's the tough thing. But, you know, in these types of environments, trying to time your way in and out of this market is going to be a loser's game. That's why we're focusing on fundamentals, just looking at energy, which was much weaker early in the week. The fundamentals of energy remain very strong.

Strong demand, supplies very tight, and producers are disciplined. They're focusing not on returning cash to shareholders and on moderate volume growth. We think energy has an elongated cycle. So we're looking at areas such as these. You can find these quality companies on sale, I think, anytime now and going forward is the time to be legging into those. Sarah Malik, appreciate the time very much. Nuveen's chief investment officer. Hope we have you back soon. Thank you. Up next, one Wall Street bank is slamming the brakes on Ford and General Motors.

The double downgrades that sent both of those stocks tumbling today. We'll break it down in halftime overtime. And later, we're charting the sell-off, the one stock that could hold the keys to the whole market. We're back in two minutes. In today's halftime overtime, a rare double downgrade for General Motors and Ford in this one coming from Wells Fargo. Both stocks have lost 40 percent of their value this year. Halftime's Josh Brown says GM is still a no touch. It's a broken stock in a broken sector in a broken market. So I don't say that to be flip about it. I love the fundamental story here.

But I would say that the proximate cause of today's downdraft has nothing to do with the economy. On a shorter term basis, the stock technically broke down. All that means, it's not magic. What that means is where the buyers should have come in at previous support, not only did they not come in, but a lot of them turn into sellers. MarketRebellion.com co-founder Pete Najarian joins us now on the phone. Pete, the reason we're having you on is because you own GM Calls. So I'm wondering what you think about this double downgrade for, you know, look, a stock that really has endured a lot of pain lately. And you say lately, I'd start right at the beginning of the year when the stock was at all-time highs. It actually got above $65 a share, and then it's been falling ever since.

I think it's somewhat unjust but understandable as well, Scott, when you really look at what's going on within the market. People are just selling first and then thinking later about what they want to do. And GM, I think, has been caught up in that. If you just go back to their most recent earnings, they beat on earnings. They beat on revenue. They raised their guidance. They had great cash flows.

They got $7 billion last year. They're expected to have free cash flow of $7 billion again this year. And they're in the midst of something that is absolutely monumental, which is this Ultium platform that they've got for flexible platform for the entire portfolio. They've already got one plant that's just about ready to go. They've got three more in the works. And it's how they're going to transition from the internal combustion engine over into the EV side of things and be able to do it all in one. And I think when you really look at this whole thing, it's going to be something, I think,

very special. I say all of this with a guy who's just owning calls. I don't own the stock. I'm still looking at the stock. Thank goodness I haven't bought it yet. But I'm still looking at it really closely, Scott, because for a lot of reasons, I never put this in the category of a competition with Tesla. I view GM as a competition with everybody else, as everybody else is chasing to try to be the next EV that everybody wants. But I can tell you this. I do think that they've got a leg up on Ford right now because of the fact that when you look at the F-150 and the Silverado, which are the big, you know, that's what everybody's focused on, I think, at least right now. But you look at what those miles and the range looks like for the Chevy product,

it's completely different than the Ford product right now. So because of that, it's better, and the price is better. It's $40,000, $40,000 for the Silverado. And yet you're looking over at the Ford for a lot more money, $74,000. One goes 230 miles and lets you boost it up to 300, and the other goes 400 miles, that's 40,000. So there's a lot of different elements here, but I think GM is pretty soon going to be in my portfolio. Hey, Pete, stick with me for a second. I'm going to steer us back to a Fed chair, Jay Powell, who is speaking right now with NPR. He is saying executing a soft landing may be beyond our

control. Also, the process of bringing down inflation will include some pain. Powell says, quote, with perfect hindsight, it would have been better to hike sooner, end quote. And inflation is just way too high. So there's a few different things to unpack there. There's the acknowledgement that the Fed was late. There's an acknowledgement that a soft landing may be tough to pull off, Pete. I mean, the Fed chair himself has already used soft-ish when describing what they can do in terms of engineering this. What do you make of these comments? Yeah, it all makes sense. And I think that they're, so to speak, manning up. They're getting

to the real deal, which is admitting the fact that they were late. I think understanding the fact, which hopefully they've always understood, this is going to be very, very difficult to get any kind of a soft landing. And I think that it's great that the Fed chair actually is putting that out there. I do think that they need to show that flexibility. And I know everybody's been talking about it, but we're talking about 50 basis point moves in the next couple. Why is 75 taken off the table? That's been a question that's been coming up more and more. I think they're going to have to absolutely look at every single angle to determine the best way to navigate this and try to get us into a position of a soft landing. But that is not going to be easy, Scott. We all know it. I know the Fed knows

it. They're just now stepping up and saying, hey, look, this is going to be pretty difficult. And I think that's something that they've always known, but I think they just wanted to voice it out for everybody. And that's probably why it's happening this time of night as well. I got to tell you, though, Pete, you know, at a time where the markets are are so unsettled and we're looking for any glimmer of anything positive to hang your hat on, to think that this can turn around. I'm not necessarily sure that a Fed chair saying executing a soft landing may be beyond our control is the thing that's going to do that. Nor is it saying

that bringing inflation down is going to cause, you know, some pain or however he characterized that. I'm not exactly sure that that's a vote of confidence, if you will, that investors are going to wrap their arms around. Yeah, I would agree with you, Scott. But I think at least he's being honest and he's being exactly who Jerome Powell has been from the beginning, which is very, very transparent. Now, they've held back something. Clearly, these comments, I think, are something that they've known this as long as everybody else has known this. So there's no doubt about that, I think. But they're at least putting it out there. People are going to digest that. And I think we'll have to figure out how we can navigate from here as we look into the future.

But you know it just like I know it right now, Scott. It's volatility. There's huge moves every day in the market. We were down over 500 points on the Dow, rallied back, but still finished down 100 points. NASDAQ was all over the place. Look at the VXN just as much as you look at the VIX would be my words. Just keep an eye on those because the VXN now has closed multiple times above the 40 mark. Meanwhile, the VIX has not. Well, that's because the NASDAQ has been absolutely

outrageously volatile. And I think we've got to keep an eye on that and try to navigate these waters as best we can. Yeah, I tell you, I mean, these comments, Pete, thank you very much. I appreciate that. That's Pete Najarian. But I'm just telling all of you, these comments mean more than ever. You've got to watch the top of Jim Cramer tonight, six o'clock, when futures open. I'm just curious as to how the market's going to react to these comments from the Fed chair, specifically Jay Powell telling NPR, executing a soft landing may be beyond our control. Getting inflation under control may cause some pain. So we'll see what the markets do with all of that. We're back right after this. Apple shares tumbling again today, and our next guest says the market can't stabilize until that

stock does. Let's bring in Mark Newton. He is Fundstrat's head of technical strategy. In other words, he works with Tom Lee as they try and figure out the signs of a bottoming process, a rebound. Why is Apple at this level now so critically important? Well, as you know, Scott, I mean, Apple represents more than 10 percent of the Q's and 7 percent of the S&P. And so when you see, you know, big generals like Apple and Microsoft break down to new monthly lows on heavy volume, it often means it's premature to step in and buy dips right away, despite what the fundamentals might suggest. So stock continues to be under pressure today, and it's accelerated given this break of support. Next key level is what?

I like 133 initially. I certainly can't rule out on a severe move, a move down to 118. That might seem severe, but that would be a very attractive level to buy dips. 118. I can't imagine what the Nasdaq is going to look like if Apple goes to 118. You know, there are signs of markets finally reaching oversold territory, but that doesn't always mean you step in and buy the first dip, as we know. So there are signs of fear, but there's really no capitulation yet, and that's important. So we're dealing with a market that simply goes down every day and everybody still has not capitulated. They're wondering where we buy dips. And so, unfortunately, that's great in an uptrend. But when stock indices really finally roll over, it's right to really respect this and

await some signs of stabilization before we get too aggressive. Were there moments today where you thought we maybe were about to start a rally? I've mentioned it since the beginning of our program. There were moments where it looked like we tried to get something going and we just couldn't get it going. Well, it's funny, you know, investors seem to say that every day, any sort of blip of green on the screen. And they're like, well, is this a low in the market? And honestly, we need to see a lot more evidence of, you know, technology stabilizing. That's the worst sector right now in the market in near term.

And it's getting worse given the movement in Apple and Microsoft. So it's right to be defensive. It's right to be diversified. And, you know, utilities, staples, pharmaceuticals, those are really the areas to be, if not also considering a move in treasuries, which finally look to be starting to bottom out. All right, Mark, I've got to let you run because I've got that breaking news on the Fed chair making these comments, very interesting ones, in fact, to NPR. We'll have you back soon. Joe Terranova joins us on the phone right now. Joe, I'm wondering what you make of what we're hearing from the Fed chair here. As entertaining as your conversation with Lee Cooperman was the

other day was also informative. He mentioned something that's very important. Markets will bottom when they stop going down on bad news. Markets should decline on Chairman Powell's comments this afternoon without question. If the market does not decline on those comments, we are at the initiation of a bottoming process. But Joe, I said when these comments were coming out, first of all, you don't hear from the Fed chair all that often. And he seems to be not only contrite, but incredibly honest about what he thinks the landscape looks like moving ahead. And in an environment, as I said earlier, which is as uncertain as this one is, is it comforting to you that the Fed chair himself says executing a soft landing may be

beyond our control? He talks about the pain that might be endured to bring inflation under control. What do you make of it as a market participant? The last nine months, the Federal Reserve has lost credibility, not only from my perspective, but from the perspective of the market. It's something that markets know already and have priced in we're looking for the rick federal reserve to restore credibility and candidly chairman powell being humble authentic admitting his mistakes is the first step now no but you're you were supposed to have confidence

in and the fed chair and even though they've made mistakes a and Mike Santoli's here, by the way, too. We're moving up his last word because he has many words now. We're supposed to have confidence, like the utmost confidence in the Fed. They made a mistake. We know they started late.

They admit that. But does this give you confidence that they really think that they can pull this off? I don't. I think it gives you confidence that they have some humility about the process, that a lot of things are out of their control. I don't think we should ever bestow upon the Fed this idea that they have information that we don't.

What they can do is synthesize it and give the message that seems appropriate according to that. One thing I always go back to a couple of press conferences ago that Jay Powell gave was when he was asked a couple of times, do you think the tightening that you're expecting to do in 2022 is going to be enough to restrain inflation? He says, no, it's not the way it works. It doesn't happen in real time lockstep. You need help from the numbers themselves. The economy is going to slow. We're going to go after the job openings and the demand side.

But I also would go back to how they were thinking about the world in late 2020, which is they never thought they could get any inflation. So they had to change their entire framework to try and promote it. Joe, how's the market going to react to this, do you think? The market is already priced in that it's not going to be a soft landing. You could see that with the loss of liquidity, the extreme volatility, and the precipitous declines. So it's good that the chairman is now running at the same pace as the market. Hopefully we get to the finish line faster and at the same time. The market should go down on this. As I said, if the market doesn't go down, it's the Lee Cooperman setup. I was going

to say, does this help or hurt the market's case? You know, arguably it could help if, in fact, it just tests people. Like, did we have this right? Did we actually calculate this likely scenario correctly? Look, the market has taken a probably an eventual hike out of the bond market in the last little while. The two year notes down by a quarter percent right from its high. So I don't know that this changes the equation, but it is a psychological test. Still stick and do is two fifties to for all of the criticism and he's not this is in unless something disastrous. I mean, he has to have heard the criticism of it. Interesting. Joe Terranova. We'll see how it all goes down. Mike Santoli. My thanks to you. That does it for us.