Closing Bell - Closing Bell: Positioning Ahead of the Fed 3/17/26

Episode Date: March 17, 2026

We’re less than 24 hours away from the next Fed decision. So how should you be positioned heading into tomorrow? We discuss with Lori Kalvasina from RBC Capital Markets, iCapital’s Sonali Basak and Schwab’s Kevin Gordon. Plus, the second day of Nvidia’s GTC conference is underway. CEO Jensen Huang making headlines at a press Q&A – we bring you all the highlights. And, Capital Wealth Planning’s Kevin Simpson reveals his latest trades. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to closing bell. I'm John Ford in for Scott Wapner. And we are live from post-9 at the New York Stock Exchange. This make or break hour begins with more green arrows as stocks post our second day of gains. Here's a scorecard with 60 minutes ago in the trading session. You can see the Dow, S&P, NASDAQ and Russell all higher. The little guys and the Russell doing better than the rest. But all up fractionally. Energy is the best performing sector. WTI moves above $96 a barrel. on which way you like it. Here, we're also tracking some notable movers in the transports today as Delta raises revenue guidance for the year and Uber teams up with NVIDIA to expand autonomous rides in 28 cities worldwide by 2028. We're going to have more on both of those movers coming up. And that leads us to our talk of the tape. We are less than 24 hours away from the next Fed decision.

So how should you be positioned heading into tomorrow? Let's ask our panel, RBC Capital Markets, Lori Calvarez. Sina, I capitals, Shannali Basak, and Schwab's Kevin Gordon, guys, wonderful, beautiful panel. Great to have you. Lori, you haven't been excited about consumer staples or consumer discretionary, I think, for quite a while. We've got all this pressure building on consumer wallets right now, especially with the oil shock, not helping labor.

How does tomorrow's Fed decision weigh into how people should be positioned? So look, I would say, you know, on the consumers, the two consumer sectors, you know, we've been underweight discretionary for a while, neutral on Staples. We actually were more interested in Staples at the beginning of the year when people wanted valuation stories. But we did a survey of our analysts on the Middle East conflict and consumer staples and discretionary were two of the main sectors that were seen at risk from knock on effects, while as much of the S&P 500 was seen as relatively insulated from the conflict. You know, I would say tomorrow heading into the Fed, you know, I have a little screen I pull up on Fed Day. you know, after Powell starts speaking every time, and one of the main things we look at is the Russell 2000. And I would say my salespeople, my traders, whenever they're sort of, you know, noodling over trades to do around the Fed.

If you think Fed doveshness is going up, you want to buy small caps. If you think Fed, you know, kind of hawkishness is coming back or the dovishness is getting dialed down, you tend to see small caps, you know, kind of be the area that gets hit a bit on that. And so our team, frankly, doesn't think the Fed is going to do much tomorrow. You know, we're always watching the commentary, but I would say, depending on where you're leading, small caps are always in the center of that storm. Oh, interesting. Shanali Basik, while the consumers feeling pressure, small caps are too. And I know you've been sort of on the small caps this year.

It could be a bit longer before President Trump's pick, Warsh gets into that Fed chair seat. And so rates might be higher for longer. How do you think that affects the rotation into small caps and how investors? should treat it. We did feel that for the first half of the year, you would see the Fed on hold. So agree with Lori, we don't expect so much movement tomorrow. Now, for the second half of the year, yes, you'll get a new dot plot, you'll get a new summary of economic projections. That's where we're keeping our focus. Because if the current FOMC revises higher their inflation target, that core PCE that they expected to come in at 2.5% this year, we expect that to be higher.

We're already higher. And so that inflationary impulse, even before the war broke out, is something we have our eye out for while the labor market is at a precipice, listen, we could still get two cuts this year. I think when you look at market pricing... Is it less likely if Warsh isn't in or no? Let's see where the labor market stalls out. I think that this is an important market, because if you think about the volatility that's under the surface,

if you're a large employer right now, are you hiring into this uncertainty? That's what concerns me. We were already in a low-hire, low-fire environment. You're not seeing widespread firing. but to the extent you see some pullback against more uncertainty, then you have that labor market that tips over a little bit from that stable position the Fed saw in January to a little less stable.

And so, Kevin, you've also been concerned about consumer sentiment, I believe, for several months. The hits keep coming. As you acknowledged last week, your bullish call on international stocks also under pressure from this oil shock. So what can the Fed say? what might the Fed say you think that affects not just the consumer position, but what might happen with the relative value of international? Well, I think, you know, to the point that Chenali was just making on the labor market, that I think really comes to the forefront here because the last time the Fed faced a similar situation in terms of energy, you know, a really big energy shock and potentially

a pretty big inflation shock was 22. Labor market is in a totally different position, you know, today versus back then. At that point, non-farm payroll growth was running at an annual pace of over 5%. Today we're basically at zero, just hovering slightly above it. Even if you take January and February in both of those jobs reports, there's sort of a wash. You could kind of argue that January was extended to the upside, maybe over, it was a little bit exaggerated to the upside. February was probably exaggerated to the downside. That doesn't really leave the Fed, I think, with that much of a clear labor picture. So in terms of what we learn from them tomorrow, I don't think it's much. I mean, I think this is another one of those instances where we're reminded that the Fed is made,

The FOMC is made up of a bunch of humans like we are, and they have as much clarity and visibility in this conflict as we do. So I'm not so sure that we should put so much pressure and so much focus on them, number one, for that reason, given the war. But number two, a lot of this can change by the time the next Fed share comes in. I mean, if it is somebody who's coming in with more of a dovish bias, but you have a lot more inflation pressure and the labor market is still struggling, I think that's going to create a totally different dynamic for the committee itself, if the rest of the committee for some

reason is voting against what the chair might lean towards in terms of cuts versus holding, that to me, I think, becomes a totally different situation and in conversation for the second half of the year. And Lori, as you work through your models, how much of a wild card is energy and that input cost flowing across everything? How much is it changing what you have to factor in? So look, I mean, it's an important question. I don't want to minimize the importance of what's going on, you know, sort of on a global basis, you know, on a human basis. But the reality is, you know, A couple of days after this conflict erupted, that's when we went to our analysts, and we asked them three questions. What's the impact to earnings from higher oil and natural gas prices?

What's the impact from this conflict in terms of direct revenue exposure from the Middle East? And then the third question was on knock-on effects. We asked them to specifically consider $100 oil for an extended period and a conflict that goes on for more than four weeks. At that time, a few days after the events, that was sort of the bear case that was in place. And we found that 72% outside of the energy, we kicked our energy analysts out of the survey, but among the other 72%, I gave them five choices, and three of them would be in sort of the low-to-no impact categories. 72% were in that low-to-no impact category on the earnings question. 77% were in the low-to-no impact category on the Middle East revenue exposure question.

It was a little bit different on knock-on effects. That was only 66% were saying it was low-to-no impact. And so the reality is that, you know, while there are, certain sectors that it will matter a lot. Our analysts flagged, again, staples and materials across all three questions as having significant impact. But the reality is we know a lot of companies hedge. We know that it will take time for some of those energy costs to work through. I also ran a separate study where I looked at earnings revisions against oil prices by sector. I didn't find a single one that was inversely correlated. So the ability of companies to manage through,

again, we're not trying to dismiss the impact, but it's something we shouldn't underestimate. I guess it depends also how long this drags on. Everybody stick with me. Let's get some more on energy from our Pippa Stevens for a check on that gas. Pepper. Hey, John, we are watching international gas prices with Qatar's Rast Lafan still offline. Roughly 20% of global LNG supply comes from the Persian Gulf, and virtually all of it is exported from that one facility.

The longer it sits idle, the harder it will be to restore operations. Nearly 90% of that LNG heads to Asia, where prices are now rising. JKM at $20 per MMTU with Europe right around 17. That means that some cargoes initially heading to Europe are now U-Turning and heading to Asia instead. Here in the U.S., Henry Hup trading around the $3 level given abundant domestic shale. Meantime, Brent is holding at 103 with WTI at 96 amid reluctance from other nations to escort tankers through the Strait of Hormuz. Product markets increasingly getting squeezed here with gasoline and diesel futures, both up some 4% today. John.

All right, Pippa Stevens. Thank you. Shanali, if this goes on for a while, I mean, certainly the consumers feeling it at the pump right now. You point out about 8% of low-income consumers, disposable income, goes to gas. Do you have a take, based on your research, on how long it takes before that really starts to ripple through everything else? You know, you heard the administration members say over the weekend,

that would be four to six weeks. I believe that's what we heard two weeks ago as well. Now, it doesn't take a lot to continue to disrupt the Strait of Hormuz, really. It really takes a matter of drones, disrupting a couple of tankers. And so the idea that this is going to be a swift resolution as it pertains to the oil market, in particular, let alone geopolitical conflict, is wishful thinking at best. We do think this is going to go on for a while. And we also think that we lower the bar in terms of extreme scenarios that Wall Street is modeling out. We don't even need to keep oil prices above 100.

We would need to keep them above 90 or even 80. We've been living under a lower than 70 world for a while now. And so we believe that consumers are going to feel that tick higher through at least the next two to three months, if not longer. And again, that currently has an impact on how consumers feel when they walk into the world every day, let alone mortgage rates also higher too. So you are seeing that real economy feed-through, and the longer this goes on, then that's when, to Lori's point, we start to worry about whether you're actually going to see a greater feed-through into input prices, broader inflation outside of headline. But I do think on the ground, it's a midterm year, John. The feeling on the ground matters. And it matters, Kevin, too, because even if it does just go on for two or three months, which I think might be a better case scenario on the pricing side, those feelings carry through and to the fall when people have their balance.

I don't know how much you are factoring the longer term political impacts in, but how does all of that frame up, what we incorporate in from the Fed tomorrow and how you expect things to play out for the rest of the year? Well, I think that, I mean, to the extent that you wanna separate consumer sentiment and attitudes versus actual consumer spending,

I mean, this has sort of been a post-pandemic phenomenon where, you know, I've sort of called it and what I've described it as is this Vipression. You've sort of been in this point, persistent depression of consumer sentiment, yet none of that has really been reflected in any of the spending data. It's been this really large wedge, whether you want to think about it as consumer spending versus sentiment or large-cap corporate America versus the average person and how they feel about things. Is that because of unusually strong employment and the low price of gas?

I wouldn't call it unusually strong. I would just call it resilient employment in the face of what has been, what have been, you know, numerous supply shocks over the past few years. I think that has been kind of the perplexing nature of this, because when you slow down as much as we have in the past year for non-farm payroll growth, it's rare, it's rare, and almost, you've never seen in history, very rare to kind of get to that zero line in terms of growth and then bounce back off of it. Typically, you get to that zero, and then you go into a recession. Even in the increase we've seen in the unemployment rate over the past three years, if I showed you a bar chart just showing how long the unemployment rate's been going up, you would say definitively, we've

been in a recession. But if I showed you the magnitude of the increase and then plotted that again, the number of years that's been rising, it puts you in a totally different category relative to history. So it's been this grind higher for unemployment, but that's also just sort of the rolling recession nature of the economy over the past several years. Manufacturing and consumer goods first, parts of services later in the white collar parts of the economy, it's been rolling in fashion. It just hasn't been all happening at once.

That's why you haven't had what we've thought of as a traditional recession in terms of labor. Can I add, you know, we have not liked the consumer, but we think that financials have been brutally sold off in all of this just because the broader sentiment has dragged the index down with it. But we do think by the time in a couple weeks we get back around to earning season and the story is going to look a lot different, that the fundamentals will held up and the banks have made money from this volatility, frankly speaking. Yeah, I would just jump in to say we had our financials conference at RBC last week and my team and I went to a bunch of presentations. The commentary on the macro was steady as she goes. You know, the consumer is hanging in there.

they were acknowledging, you know, even the fact that tax refunds haven't been as strong as initially anticipated, but were still a tailwind. Some of the banks were talking about how their customers are used to dealing with the macro noise, with the macro challenges, with the macro volatility. And I just to tell you, it was, you know, even when asked about the situation in the Middle East, it was a very, very solid and reassuring tone. Okay. Lori Kalasina, Shanae, Shanae Basik, and Kevin Gordon.

Thank you. Invidias, GTC Day 2 is underway. CEO, Jensen Huang, is holding a press Q&A right to. now. So let's send it over to our Christina Parks and Nebula. She's live in San Jose with the highlights. Christina. I was actually in the room and I literally just ran out, tried not to make a distraction, but of course CEO Jensen Wong still on stage. And there are several highlights that I want to focus on. So first on circular financing concerns, the CEO addressing criticism that NVIDIA is funding its own customers saying, quote, we finance companies we believe

will succeed, Corweep, Nebius, N-scale. The reasons we know they will be home runs is that we already see the pipelines. We have the information. On demand, I asked Jensen Wong himself whether InVDIA would break out individual product revenue so investors can better understand how that $1 trillion figure grows with GROC and storage, etc.

He didn't actually give specifics but was clear the number will of course be much higher than $1 trillion. Listen it. It does not include GROC. It does not include storage Bluefield. It does not include Vera Rubin-Ur-Ur-Ltra. It does not include Feynman. It does not include

Feynman next. Okay. It does not include any of that. Only Black Wolf Plus. And it's standing right here with 21 more months to go, which means it is likely to be larger than $1 trillion. So you're setting a floor right now.

And on capital returns, that's a number that I think might get lost right now in all of this event. The CFO Collect Crest speaking to analysts just about a few hours ago, saying Nvidia will return roughly 50% of free cash flow. through buybacks and dividends, up from just 40% last year. If you look at sell-side estimates putting free cash flow

to roughly, let's say, $190 billion this year, that could mean roughly $95 billion return to shareholders. Double what we saw last year. So even if you're not super bullish on this stock, I thought that was a pretty incredible number. These are some very big numbers that we have to get used to and digest from Nvidia. A trillion dollars is a very high floor.

Christina, thank you. For more on that, let's bring in CNBC. contributor, Big Technologies, Alex Cantorwix. Alex, good to see. I saw you here at the exchange yesterday off camera, but let's talk about Nvidia. It's weird. Invidia sort of has to make the case at this point.

It's been doing so well that it continues to do well and maybe can do even better. What have you found to be the most notable points out of GTC? Well, first of all, it just highlights the expectations on this company. Only Nvidia could tell you that it's going to. to make a trillion dollars on two products or thereabouts over the next two years, and people view that as a disappointment. But you have to think about the environment that we're operating in. We're in a world right now where the CAPEX among big tech companies is expected to be about $700 billion this year up from $400 billion or so last year, and so who knows where it will

go in 2027. Maybe it'll be a trillion dollars if it keeps up on this pace. So if you're looking out maybe one and a half, two trillion dollars are being spent over the next couple of years for Nvidia to say we're going to walk away with the trillion. People are starting to, you know, they're expressing disappointment about that. But ultimately, I think the business is in really good shape. They are going to capture the lion's share of that CAPEX. And as AI continues to accelerate, we were talking yesterday about all the different product uses that are available today that weren't available just a couple months ago.

I think Nvidia is going to be posed to capitalize there. For a while a few months ago, people were excited bidding up Nvidia stock because of how much folks were buying it. And people were excited about the hyperscalers, you know, Google, Amazon, Microsoft, about how much the potential was for them to grow in AI, even though they were spending a lot. Now there seems to be some lukewarm sense on both. How do you balance the opportunity for the infrastructure makers like Nvidia, even though Nvidia is kind of like a single? name there and the margins against what it means for these big companies that are spending all that money on the infrastructure. Well, first of all, there was a frenzy in stock buying over the past couple of years where people just saw the growth that NVIDIA was turning in and they wanted to be a part of it. So they ran to it.

But right now we do know that there's a lot of revenue forecasted for NVIDIA and it has sort of stagnated a little bit over at least in 2026. So I think there is room to grow there. But as far as where the margins are going to be found, I would argue that even those who are deep within this, whether they're the chipmakers, the application builders, the hypers, they're not quite sure. And there is an argument to be made for every single one of these categories that they could be the one that capitalizes the most or they get nothing. Think about model building, for instance. If you're building something as powerful as maybe artificial general intelligence, you know, that should be economically valuable. But if somebody else builds it, can you hoard it? Can you charge your premium over it or does it commoditize? Same with chips. We're seeing this with the inference conversation around Nvidia right now. You would think that Nvidia, you know, as AI gets adopted more, would be in the best position. I think it probably is. But as we move from training to inference, it's going to have much more competition. So my perspective here is that it is dynamic, it's volatile, it's changing rapidly, and investors are just going to have to hold onto their

seats for the time being as we see this shakeout. One of the areas we perhaps don't talk enough about is the software for data management that sits in between the infrastructure and the applications, thinking about also how all this data gets stored, the databases that make it suitable for AI, how you manage at the data lakes, thinking about the likes of snowflake, data dog, et cetera. How do you think about their place in this ecosystem and maybe their valuations or the amount of conversation there is about them relative to the rest? Well, I think they're going to be very important. goes to this broader conversation around, will software be worth something or will it be worth as AI

take off? Well, even if you go into an era where you're doing much of your computing within the chatbot, you're still going to need good data to be able to work off of. It's not like all of that's just going to be stored in the memory of chat GPT, no matter how good it gets. So I think these middle layer companies do play a very important role and they're not going to be replaced anytime soon. And so even though we might see some hysteria like, oh, AI can build an app, which it can and it's impressive. I think it's very important for investors to sort of separate that functionality out from the core infrastructure that a company like a snowflake or a data dog is providing. And when data bricks comes public, we'll be talking a lot about that too, I'm sure. Alex, thank you.

Alex. Thank you so much. Now let's send it over to Kate Rooney for a look at the biggest names moving into the close. Kate. Hey there, John. So shares of Qualcomm. We'll start there rising today as the chipmakers board approved a new $20 billion buyback. Also lifted its quarterly dividend.

Shares of that stock falling about 20% this year, year to date. It does get hit by this global memory supply crunch as part of that. Then you got 10 cent music shares at the same time plummeting today. Those shares down about 24%. And we're talking about earnings. As part of that, it did beat on earnings and revenue for the quarter, but gross margins. and monthly active users did come up short, which could be a sign of increasing competition from rivals like BytDance, the Chinese music streaming platform pacing for its biggest drop since March 2021.

Finally, Eli Lilly's share is dropping on an HSBC downgrade to reduce, that is from hold. They're cutting the price target to $850.50 that's down from over $1,000. analysts say the market for obesity drugs might not be as large as previously believed. Lilly's outlook far less cautious, though, than rival Novos, John. All right. Okay, thank you. And we are just getting started. Up next, is the software sell-off done? IGV software ETF is now up nearly 6% in a month. Our own Leslie Picker just caught up with the founder of the world's largest software-focused private equity firm. What Orlando Bravo told her about his outlook for the space. Exclusive highlights are ahead. And we are live from the New York Stock Exchange. You're watching Closing Bell on CNBC. closing bell our Leslie Picker just caught up with Orlando Bravo is founder of private equity firm Toma Bravo joins me now with the big tech takeaways Leslie I've got real questions about private credit and his outlook on what's happening there not just with his exposure but everybody else's

yeah so he they actually Toma bravo has about 25 billion dollars in private credit exposure and he said the book at least from his purview looks okay Toma Bravo, as you mentioned, though, is the largest software-focused investment firm spanning private equity and private credit. So it's really at the intersection of the market volatility and the concerns spanning those areas. Bravo sought to assuage those fears telling us in an interview that, well, they've made mistakes and aren't perfect. They buy, quote, high-quality software and run the businesses, quote, really, really, really well. When I asked him about the notion that some people think private equity-backed software is going to cause the next crisis or is, is prone to a blowup. Here's what he had to say.

Now, there was a lot of excess in the business in general, private equity, private credit, and software in general, since 2020, 2021. Some of the issues now in those sectors that relate to software are due to those excesses. And some of those issues are also due to the interest that generalists had in buying software companies. There are so many cases that we've seen

where generalist investors that are good in general have entered the space and have bought software companies that really lack deep franchise value, even though their gross retention and net retention metrics look good. And those companies now have a bit of a more uncertain future with AI right upon us. Bravo also said there are a lot of public software companies

that will be disrupted by AI and that their valuations make sense. He said they would have no interest in buying those companies, John. Wow. Okay. Leslie Picker, thank you. Now, still ahead. Five-star stock advice. Capital wealth planning's Kevin Simpson standing by with his latest trades. And closing bell comes right back. Welcome back to closing bell. The major averages are in the green as we head towards the close. Investors are now turning their attention to tomorrow's pivotal Fed meeting. And joining me now to discuss how he's positioning and to share his top stock picks is Capital Wealth Planning's Kevin Simpson. Kevin, good to see you. So energy barely came up the last time we did this Fed dance in late January, and you say oil near $100 bucks creates a near-term tax on equities. Do you think that Powell addresses the potential impact

of that, should it be a sustained price level? You know, I'm not sure what we should or can or will expect from Chairman Powell tomorrow. I think that the meeting is very, very important, John. but I'm not expecting much. I think the tone will be somewhat dovish, mildly dovish. I'm reluctant to expect them to talk about higher energy prices only because if there's a resolution to the conflict in Iran, then this might not be as inflationary long-term as I'm concerned that it could turn into.

So absolutely, the sooner this resolves, the better. But I think tomorrow is really about, can there be a rate cut towards the end of the year? can there possibly be two, anything short of that will be somewhat negative, I think, in terms of equities, at least in the short-term trade for the rest of the week. To some degree, though, doesn't that energy wildcard play into whether there can be a rate cut or not? Because if it breaks something else and you might feel like you need it, but also if it flows through and causes more inflation, then you might feel like you can't.

Yeah, and that's the part that scares me the most is the inflationary. You know, I was at the pump the other day, and I haven't noticed the price of gas for years. And literally, I was pumping into an SUV, and it was almost $100. And I looked at the price, and I live in Naples, Florida, $4.99 a gallon. Now, granted, I'm looking at 93, but that's impactful. And this is an inflationary situation that's real for every single one of us. And if it's lasting, then you're right. It doesn't matter if Chairman Walsh is looking to cut rates multiple times.

If the data doesn't support it, there's no way they can do it. And I think everything surrounds energy at the moment because that inflationary pressure is a genie that you can't put back in the bottle. And if it translates to higher inflation, which is already hovering around 3%, higher than the 2% target, we'd be lucky to get one rate cut at the end of the year, John. Well, SUVs aren't the only things that guzzle gas in a way AI-driven data centers do too. I believe you had meta as a top pick for the year. Boy, are they spending a lot of money.

How do you think they actually make the most of that? Is it because they're able to monetize that AI investment either more powerfully or more quickly than rivals? Yeah, I mean, meta specifically, I think of it more of an advertising business. that when AI comes into play, this isn't a disintermediation with meta. This is a pure embracement of AI and efficiency. Sadly, you look at the news over the past couple of days talking about bigger layoffs at meta. And really, that's a complete translation of we can do this cheaply with AI. We can do this more efficiently with AI.

And we can do this with fewer people. So that is a company that very specifically can benefit from artificial and intelligence, and I think the efficiency there will be one of the first companies to really prove it. With the time we got left, tell me about your two significant recent stock buys. So if we go adjacent to the big spenders, the hypers, when we look at the two trades that I bought this week, they're about as far removed from tech as possible, except that they're really important to tech. The first one is Lindy. Lindy is a company that has an massive helium reserve. And helium, we don't think about it or talk about it very often.

it's absolutely critical to semiconductor manufacturing. This is defense, this is offense, very, very efficient business model, perpetual compounder, kind of boring. Second trade is Exelon, very similar to AI adjacent, old school utility, a little bit boring, perpetual compounder, almost a three and a half percent dividend. So we kind of get paid while we wait through any economic cycle. But what I like about this business, very important to your metacom and John, is that over the next four years, they've committed $41.3 billion in capital expenditures. They know that the demand is going to be there,

and they want to be in the position to supply it. So Lindy and Exelon, two boring companies that I think can do well regardless of market conditions. Yeah, boring can be good sometimes. Kevin, thank you. Thanks, John. Well, up next, we're going to be tracking the biggest movers as we head into the close, and Kate Rooney is standing by with that.

Kate. Hey there, John. So one ride hailing company getting to boost from a new Nvidia partnership. And then we've got some shortseller interest hitting shares of a major fintech company. We're going to tell you who we're talking about in closing bell returns. 16 minutes until the closing bell. Let's get back to Kate Rooney for a look at the key stocks to watch. Kate.

Hey, John. So we'll start with Uber shares moving higher after the company said it's going to be teaming up with Nvidia and a mix of other autonomous vehicle partners to roll out robotaxy services in up to 28 cities, world. Worldwide by 2028, the service will launch in L.A. And San Francisco next year does mark Uber's most aggressive autonomous play yet. Meanwhile, airlines are broadly moving higher today, led by Delta and American Airlines after they raised revenue guidance for the first quarter. Delta CEO Ed Bastion told CNBC earlier that strong demand has led to higher revenue growth

than expected despite higher jet fuel prices since the war in Iran started. And finally, shares of SOFI are falling after activist short-seller Muddy Waters disclosed a short position in that fintech provider, alleging management gets paid for diluting shareholders, among other claims. They also say, SoFi's reported EBITA is inflated by 90%. CNBC has reached out to SoFi. No response yet, John. All right.

Okay, thank you. Well, up next, the setup on Lulu Lemon, we're going to run you through the key things to watch from that report and hear from a top retail analyst when the market zone comes next. Welcome back. We are now in the closing bell market zone. and Young Yuma from PNC asset management are here to break down these crucial moments of the trading day. Plus, your earnings set up. Sima Modi watching DocuSign, Gabrielle von Ruge, has the setup on Lulu Lemon and Oppenheimer's Brian Nagel covers that name and is standing by with what he's watching from the print.

Mike Santoli, Lulu has been just an unusually poor performer. I think we're expecting the first quarterly revenue decline in about six years from this company. Is it a canary in the coal mine or just an anomaly? I think it's more kind of busted growth stock. It's a brand that's actually struggled on its own terms as opposed to really kind of folding in the face of macro pressure. So I don't know that it's necessarily going to be that much of a bellwether in terms of consumer, broadly speaking,

but it's definitely in that sort of penalty box with a lot of other athletic gear, I would say. All right, Gabriel Farn Rouge, take us deeper with a preview of what to expect from Lulu's report. in overtime coming up. Yeah, so Lulibin is expected to report earnings per share of $4.78. That's going to be on revenue of $3.58 billion. The company raised its fourth quarter guide in January, so these numbers are nearly identical to that forecast. So the key things you're going to want to watch tonight are going to be guidance and an update on that CEO search. The bulk of Lululeman's

growth has been coming from its international markets. When it outlines its fiscal 2026 guide, investors will want to know how sustainable that growth is and when its core America's region will get back to growth. They're also going to be looking for an update on the CEO search after Calvin McDonald's step down at the end of January. If a new CEO is announced, that could end up overshadowing the results and lead to a conservative guide. John? All right, Gabrielle, thanks for more on Lulu Lemon. Let's bring in Brian Nagel of Oppenheimer, who covers the stock. Brian, long ago, you loved this name, but you since maybe anticipated what has been happening to,

recently EPS estimates have been drifting lower over the past month, I think. What are you most watching from this report? Well, good afternoon. Look, I think the prior guests, I said things said it well. What's really most important here, what could frankly make this report excited is whether or not there's a CEO announcement. Now, I have no idea that's going to happen, but there's been a lot of chatter, movement outside of Luea.

You have an activist investor, a notable activist investor. a notable activist investor that now a big position of Lou Geleman has been advocating for a CEO. Then you have the company's founder and former CEO working to upend the board. So that's really what makes Lulu Lemon potentially interesting here.

The numbers are the numbers. I mean, like everyone's saying, you know, trend in week. They're holding in. I don't think they're necessarily getting worse. Okay, but this is, you know, the business has been sought. But really the most important thing

that could come out this evening is any announcement on the CEO or management team. How much of a wild card is China? I think a fifth to a quarter of their businesses there? Yeah, so look, for Lulun, Levin, China is still small. And the other important thing to note is that that's really been a bright spot. So if you look at the weakness for Lulu Lemon, the fundamental weakness has been primarily in North America and the United States and their legacy businesses.

I mean, as of the last quarter, even the last update that gave us in mid-January, China very much remains a bright spot. And that's largely because the Lulu Lemon brand is still so small and new in the Chinese market. So is this comparable at all to a Nike situation in terms of the turnaround need, the CEO questions, even though Nike's got a new CEO in place, we're still kind of waiting to see exactly how that strategy is going to play out. And then, you know, the brand potential should they find their way out of the woods? Oh, look, there are similarities here with Lululmin. I'm trying to make this quick because I think it's an important point. In my mind, you know, I've studied this sector for a long time now.

Really, the commonality, if you will, is the pandemic really upended these businesses. Both Nike and Lulmin, in the heart of the pandemic, who it's performing extraordinarily well, where it's consumer spending shifted to this category as there wasn't really a need to innovate. It's when the economy or society, he started to pull out of the pandemic, Nike as well as Lulu Lemon really got caught flat-footing. But they would not innovate. I think they allowed opportunities for smaller competitors to take market share. And now both companies, and they have different stages,

but both companies are attempting to turn around after that cycle. Now, I think Nike's further along. I mean, I think Nike sets up quite well here. Lulu Lemon's got work to do. But again, like I'm saying, that the CEO announcement, I don't know if it's going to come tonight or not, That's going to be the first big step for being left. All right. Well, we see if they're any closer, at least, to getting that announcement, even if it doesn't come. Brian, thank you. Now let's end it over to Sima Modi for a look at what to expect from DocuSign after the bell.

Well, John, as you know, software companies like DocuSign have seen their stock fall dramatically over the past six months. Their earnings tonight will provide a much-needed gut check on the company's moat, its pipeline of enterprise clients, and how it's using AI on contract management and betting Gen. capabilities into document preparations and e-signatures, plus the latest on its growing partnership with Anthropic. One trend that we've been seeing this earning season is software companies announcing monster buyback. Salesforce, ServiceNow, HubSpot, among others.

We'll see that continues when docket sign reports tonight. The stock is down about 50% from its recent high, John. All right, Sima, thank you. Now, as we head toward the closing bell, let's bring in Young You, Ma from PNC Asset Management Group. Young you, thanks for being here out with me at Post 9. So we got the Fed meeting coming up tomorrow, and we've had all of these economic shocks from the war in Iran. Tell me what is it that we might get from the Fed commentary tomorrow that could frame investors thinking about how persistently high oil prices, if we get them, might affect the U.S. economy, might affect the dollar, et cetera.

Yeah, thanks, John. It's great to be here. The Fed's announcements, Mara, I would caution investors not to have a knee-jerk reaction to what the Fed says. There's a lot in play. There's very high uncertainty. The Fed may come out and say it's concerned about short-term inflation from the oil shock. It wouldn't surprise me if we had a little bit of a hawkish tone. But the markets are already pricing in only a 50-50 chance of a rate cut by September. So there's a lot that can happen between now and then, either positive or negative on the geopolitical space.

So I wouldn't put too much stock in what the Fed says at this point. I think this can change over the coming months here. More broadly and focusing on just the oil piece of this, putting the Fed aside for a moment, how much of a bifurcation might this be driving between when you look at international markets overall and when you look at emerging markets specifically if you have these higher oil prices for enough time for it to have a sustained impact? Yeah, a sustained impact would probably come after a few months. So, you know, I think the market right now is pricing in de-escalation, or at least some degree of de-escalation within a few weeks. If we get a sustained impact, let's say three, four, five months, these international markets, emerging markets included, are much more dependent on oil, much more exposed.

Their industries are the cost structure to oil prices for their economy. So I think this is going to be more of a challenge. Some of the weaker areas in international economies could start to see down momentum. And that's actually why we like technology. We still see technology as low exposure to an oil shock, an area for growth. But the international economies, broadly speaking, have less technology exposure relative to the U.S. Now, like my guests at the beginning of the hour, you also like financials. What's your thesis behind that?

Well, look, financials, I think there's some near-term headwinds. There's some near-term concerns about credit. Obviously, much of that is focused on private credit, but credit spreads broadly and high-yield. have been increasing as well. I think we have to see incoming survey measures, such as the loan officer's survey that the Fed does, or even the Dallas Fed does a banking survey as well, to see whether banks are starting to tighten lending standards.

If they are, I think that could be a signal that there's less availability for credit in the economy, and that could start to have ripple effects broadly. But for the financial sector itself, we think there's some headwinds and some tailwinds. There's been a pullback. I think that's the biggest thing you can say about where the financial sector,

financials are right now or the banks is that we've had a nice pullback and perhaps you see betty entry points when we had before. It sounds like your excitement about the financials is moderated lately. Moderated a bit. I think we have to get through some of these credit concerns. I think we will get through them, but I don't necessarily think we've hit the apex of the credit concerns. That could come in the coming months or two and actually present a better buying opportunity. You've been cautious on the consumer and gold as well. How long, well, the consumer situation we talked about at length this hour with the gas prices and whatnot. How long do you expect that? What's the gold situation, given the rally it had for quite a while? Well, gold had a tremendous

rally. Gold hasn't acted as well as you would have liked to have seen during this geopolitical, you know, concerns we've had in conflict in the Middle East. We don't like to see when something that should behave better doesn't behave quite as well as we would expect. Yes, part of that's the strong dollar, but you can't completely write off the sort of modest movement in gold to only a strong dollar because every time the strong dollar in gold did perform well. You know, we think it's okay to part money in gold for investors that want to hedge or be cautious, but in terms of that big strong run the way we had over the prior year. So we think that's probably behind us and gold is more of a hedge place to part money.

Aside from individual stories like an Nvidia, like an Apple, where investors view it is either being very exposed in a positive way to AI or a negative way, is there a anything that AI is driving in the data yet from your perspective other than sentiment? Well, I do think there's a lot of anecdotes. Now, anecdotes ultimately bubble through to hard data. But right now, what we have are companies really aggressively trying to figure out ways to implement AI, to gain efficiencies to AI, and those concerted efforts are going to pay off. We're very confident about that. We actually think the tech sector here is well positioned. We think once we get to the other side of this geopolitical chasm that we have right now. The tech sector, which has been outperforming,

is going to continue to outperform the rest of the year. And a lot of those peak concerns in technology are behind us now. One more quick one before we get the bell. Is Powell for longer, which could happen if they can't get Warsh in because of the Tillis hold? Is Powell for longer higher for longer? I don't look. I think the Fed is on the back burner. And the reality is it's going to be a while before the Fed is front and affecting the market. So I think it's not a huge difference right now. Yeah, I doubt that he will tip his hand too much after what might happen if they're not able to get a new chair

in, if he will continue to serve in that FOMC capacity. But here if you're closing down, let's go.