Closing Bell - Closing Bell: Snapback Here to Stay? 4/26/24

Episode Date: April 26, 2024

Is today’s bounce back for real? Eric Johnston from Cantor Fitzgerald, Courtney Garcia of Payne Capital and Brian Levitt of Invesco give their expert forecasts. Plus, Big Technology’s Alex Kantrowitz breaks down the big move in Alphabet post-earnings. And, Julia Boorstin tells us what’s behind Snap’s surge – and brings us key comments from CEO Evan Spiegel. 

And welcome to Closing Bell, everybody. I am Brian Sullivan, in for Scott once again. And we are, as always, live here at Post 9 at the New York Stock Exchange. And we begin this Friday, folks, with stocks rallying. That's after yesterday's big pullback. The major averages now on course for weekly gains. In fact, their best gains of the year. Hard to believe, but true. Investors shaking off another hotter-than-expected inflation read.

An index on total spending known as the PCE ticking higher in March. That is pushing Wall Street's dream of rate cuts either further out of reach or maybe later in the year. We're going to find out. We've got a great panel to kick things off. In the meantime, here is your scorecard with 60 minutes to go in regulation. Green across the board. Got the Dow, S&P, and NASDAQ up.

And look at that. The NASDAQ is up 2%. And like I just said, hard to believe but true, NASDAQ on pace for its best week of the year. In fact, best week since November. And we've had a huge sell-off at one point yesterday. What a turnaround. I think my neck hurts from the whiplash. All right.

Comes, of course, from what else? Big tech. The strong reports from Microsoft and Alphabet move those names and the markets higher. Amazon. It is also up ahead of reporting their results next week. All of this taking us, all of us together, watching, listening here in person to our talk of the tape. Is this snapback in stocks here to stay? What a panel.

We've got Eric Johnston of Cantor Fitzgerald, Courtney Garcia of Payne Capital Management, and Brian Levitt of Invesco. Courtney, of course, is a CNBC contributor. Thank you all for being here. What's your take on this? I mean, it's hard to believe. Best week of the year. And like yesterday, we're like market alert, red across the street, sirens going off. What happened? So we came into this week with the s&p the rsi was about 31 um we which has proven to be a very good entry point um from a short-term perspective technical bounce technical bounce yep um we you know we also had if you look at the last two weeks of april post tax day seasonally the last two weeks are also favorable. And then, of course, we were looking forward to mega cap tech earnings along with the PCE.

And, you know, the PCE was something that the market was concerned about. I think one of the things happened today, the print, when you look at it on an absolute basis, we think was a very, was a hot print. That's what I thought, too. You're looking at the details. Yes. They seem to care. Absolutely. I thought inflation and the Fed were everything.

That's right. And I think part of it was expectations, that there was a concern that it could come in even hotter than it came in. And then clearly, obviously, earnings from Microsoft and Google were clearly a favorable dynamic. But this was really just a bad thing. Can I hit on that point? Because that idea that you bring up, Brian, that inflation and the Fed are everything. Think about it, though. Nominal growth is strong, right? Growth continues to be good. Inflation a little bit more elevated. I'd actually prefer strong nominal growth and less rate hikes than what everybody was expecting,

which is weaker economic growth and more rate hikes. So we'll have to deal with inflation over time. I do expect it'll continue to moderate, but strong growth. So would you care? Let me ask it a different way, because I'm out there. I've been on no rate cut island. Nobody cares what I think. Why not? I just put my vote in because I can and they can't stop me from saying it. Do you care if we get any rate cuts this year? I care most that tightening's over. So this conversation that the Fed might have to raise rates again, I am not in that camp. When the market was pricing in six cuts, it was a little out of whack with where the Fed was going to be. So we're getting closer to alignment. Do I care about the timing or the magnitude this year?

Not really. I'm more focused on the fact that over the next couple of years, we're going to be in an easing environment with the yield curve normalizing. That's a good backdrop for risk assets. Courtney? Yeah, and I want to echo that. I think that's really what investors should be focusing on is that the economy is still improving. The consumer is still strong with wage growth improving. Realistically, what you're seeing right now is even though rates are over 5 percent, many corporations actually readjusted their debt before rates went up in 2022. Many households have 30-year mortgages under 4%. So a lot of people aren't affected as much by

these higher interest rates. And while wages keep going up and the consumer is still strong, that's how we're able to get through this period, even if rates don't come down. But is the consumer still strong? There's a show at seven o'clock. It's called Last Call. You're welcome anytime. All of you, by the way. We showed how all these consumer stocks, Ulta Beauty is down 20 percent this month. Walgreens, they got a lot of problems. They're down 18 percent this month. There's all these retailers where the stock market, Courtney, is acting like they're in trouble. Maybe they're unique situations. I don't know. Are you worried at all about the consumer? And I don't think that's happening across the board, right?

Because what's happening is people are affected by inflation. I don't think that you can discount that. But on the flip side, you're seeing like airlines and travel is still continuing to be strong. I think people are still going places, not buying stuff. Which changed during COVID. And everyone said, OK, this is just going to be a certain cycle of this. Maybe that changed longer than people realize. So it's not the fact that the consumer's in trouble. They're just having to decide where those purchases are going. And so that's where when

you're looking to reinvest into the economy, which areas is the consumer going to continue to be strong in? You probably are going to see that experiences over goods for a little while longer. I think the consumer is strong, but the consumer is also weakening. So if you look at savings rate, right, savings rates about 3.5%, you know, still high, but it's at close to the lows, you know, since the pandemic. High prices are still eating at the consumer, eating at the excess savings. Nobody, $1.1 trillion in credit card debt?

That was all. Yields going, nobody seems to care. That was all Taylor Swift tickets. Well, that's half of it. You're probably not wrong. And I know that debt as a percent of income, people are going to at me on the X, but debt as a percentage of income, it's yes, it's low and near all time lows. But I know people, you're getting something in the mail says, hi, by the way, we just raised your credit card APR to 24%. Thanks for being a valued customer. But, yeah, I mean, the consumer is being helped out by their fully employed net worth, right,

between home prices where they are close to the highs, equity prices at the highs, and still have that excess savings that's declining. So the consumer on an absolute basis is still strong. But I think directionally is what we have to look at, which I think is important and showing some incremental headwinds. And some of the corporates are. So let's bring it back to stocks, which is why I assume I'm here today. So I've called you all in to talk about the stock market. I mean, yesterday we had a bad meta number.

We had some new inflation concerns and the Dow. I'm not going to say crashing, but down a bad meta number. We had some new inflation concerns. And the Dow, I'm not going to say crashing, but down 700 is not nothing. Right. Right. And everybody's kind of sounding the alarm. Markets come back yesterday afternoon. Microsoft and Alphabet put out a good print last night. And now it's like meta never happened.

Maybe it didn't happen. Maybe it's all in the metaverse. Maybe nothing's real. Yeah, meta happened. I would also categorize. People always ask when does volatility come to markets, when do drawdowns come. It's almost always the result of policy uncertainty. So we're grappling with some policy uncertainty here, and we should expect some swings. But ultimately, I come back to the idea that peak inflation, peak interest rates, peak tightening all favor stocks over the subsequent years. And that's certainly been the case since inflation peaked in June 2022.

And since the Fed was done raising rates in July. It's a little wonky. We'll call it WBI, Courtney. Wonky, but interesting. Do we care about the U.S. dollar? I mean, it's just soaring. See the Japanese yen? We should do the show in Japan. Half price. But it's incredible. Do we care at all about rates, where they are, 4.75 on the 10? Do we care that the dollar's up? Or do we just care that the momentum's there, the stock buyers are there, consumer, to your point, is still there? I mean, broadly speaking, yes, I think those things are going to matter. I don't think you can discount the dollar. It's going to affect certain areas of the market more so than

others. But really, we're in this period where profit cycle is actually starting to increase. And what you're seeing is everybody's been so excited about the Magnificent Seven, but it now trades at about 38 times next year's earnings, whereas the rest of the 495 stocks are trading 17 times earnings. That Mag Seven profits are probably going to decelerate, whereas the rest of the economy is starting to accelerate profits. I think that's what you want to look at is the economy is still strong, consumers are still strong, profit cycle is increasing. So, yes, there are concerns. There's always going to be.

But I think those things are really what you want to focus on. So are we rotating to other areas then? Like we've talked about for six months, we've been talking about this rotation into small and mid-cap. Right. It happened. We got a little taste of it. It was like November, December.

Yeah, here it is. And then it kind of went back to the mags or Super 6. Well, and think about what that was. If you want to think about it from the perspective of the Fed, by November, December, the market's thinking six rate cuts, normalized yield curve, the funds rate at 350, with the 10-year at 4, 4.5. So that's a very different picture.

And where you've been this year is pricing out those rate cuts, which has been less favorable to small cap in value. So I still believe, and I'm with Courtney on this one, that you are starting to see some swings. And as the Fed eases, when that actually happens, you normalize the yield curve, that should help broaden out the market. And small caps really, really need Fed rate cuts, right? Yeah, I mean, they are rate sensitive. They seem to be a lot more rate sensitive. I mean, we know the MAG-7 is not rate sensitive at all. Nobody seems to care one single bit.

And I get it. They're AI, it's tech, whatever. Whenever we saw rates move down, small caps and mid-caps would move up. And now the reverse is happening. So if you're a smaller mid cap enthusiast or you're curious about, you're looking around, you're poking around the store, small and mid caps, not yet maybe. Right. Do we need lower rates? Well, you need the expectation of lower rates. So it doesn't actually have to think about November and December.

Small caps are up 20 percent. You need the expectation that rates are going to be coming down. More recently, it's been the expectation that rates are not going to be coming down, which has derailed that. If you believe in the thesis, lower rates, normalized yield curve, more normal environment, finally out of this strange COVID world that we created. Not that we're not gathering together, but we created a lot of inflation. Still plexiglass. I mean, we've got People in masks in New York again, for different reasons. Yeah, we're not a believer in small caps. And the reason that the secular trends that we're

seeing around, whether it be AI or even some of the fiscal tailwinds, are favoring the larger cap companies. Small cap is definitely much more levered. They're much more levered companies, right, get hurt by higher rates. If you look at earnings estimates, looking back the last year or two, small cap earnings estimates have gone down, right? So they're actually, their run rate of earnings have been really low. But that's the consumer, Courtney, that's why I'm confused, right? The consumer, to your point, go to Newark Airport right now,

probably an hour-long line for pre-check. Easily. Which is faster than clear now for some reason. It is. Have you noticed that too? Yeah, I've noticed that also. Clear, right? You've got to figure that out somehow because we're paying. Anyway, it's packed.

And yet small caps apparently aren't benefiting from this bodacious consumer. That's where I guess I'm finding the disconnect. I mean, I think the consumer strength is really it's in pockets. Clearly, service has been very strong, but it's even within service. You know, restaurants have been on the decline in terms of their same store sales. Yet, obviously, you know, airlines have been very strong. So it's really been, no, it's been a very mixed picture. And that's been true really throughout not just the consumer, but throughout the economy, throughout enterprise spending. You're seeing big divergences.

And you've seen that during earnings season where, you know, over 50% of the companies have traded down. I feel like, and hopefully this is not just going to sound incredibly weird because it's Friday and why not? I'm a weird guy. I feel like the stock market is turning into British soccer, English Premier League. There's three or four teams every year that can win. Nobody else has a chance, except for Leicester, one crazy weird year. But the market is just the Mag 7 and literally 3,500 stocks just kind of follow along and hope not to get relegated someday. You know what I mean? Does that make sense?

Can we live on a market where it's just 10 stocks and they're all running all these ETFs? Hundreds of ETFs have Microsoft and Apple and NVIDIA in them. Literally 400 or 500 ETFs each just pulling everybody along. History suggests that does revert to a mean. I mean, you don't typically sit there with five names representing one third or more. That's where we are. That is where we are. And we've been there for a while. And it's why I still categorize it as a bizarre covid environment that we're working our way through. We've we've been in this environment where we've raised rates significantly and made it more difficult for for broader parts of the market.

And ultimately, what it will take is a catalyst, right? If we're sitting here in this same environment of high rates, that's prohibitive for more of the, and slow growth overseas, which challenges China. We have the Fed next week, right? So let's say we get, you know, all of a sudden Jay Powell takes off that hat, the hawk hat or pigeon hat, whatever it is right now, and puts on that dove hat. And we all of a sudden we start hearing Powell and others start coming out and sounding really dovish. Rate cuts are likely on the way. Do we get a 10 percent pop in equities? Well, I think you've seen how much that affected equities right from the end of October until the end of March. Right. That was on the preface that the Fed was likely going to be cutting interest rates up to six times this year. So, yes, the second they get dovish, the

markets are going to go higher. And I think that's why they're not going to like indicate that they're they're lowering rates sooner because they don't want to just put that fuel on the fire and then cause the economy to go further just because they're indicating the rates are going to come lower. So probably nothing's going to happen next week, but everybody is going to be really hinging on all of the rhetoric that they're speaking. I would be shocked if they're dovish, to your point, but if they are, I mean, that would be a good thing for the markets. You know, we've got to remind our audience, it's a global world, right? And we're actually like midpoint for the world in terms of markets this year.

We're doing okay, but if you watched my show last night, you would know the best performing stock market for the world in terms of markets this year. We're doing okay. But if you watched my show last night, you would know the best performing stock market in the world is Turkey, Italy, Ireland. They're doing better than we are. And I'm bringing that up because it feels like the entire world is reflating. It's not just us. This is a global story. Are there ways to make money around the world, not just here? Yeah, there is. And a lot of the rest of the world had their own challenges. You know, when Courtney talks about how many Americans have fixed rate mortgages, that's not the case in

other parts of the world. And so whether it's the UK, Europe, and if you look into China, you've had weaker economic environments, even recessions in certain parts. And so what you want to see for markets is you want to see things getting better relative to expectations, not necessarily good, better, and you want to see policy support. So in those parts of the world, that's what you're getting. Yeah, I mean, I think the big difference within the U.S. markets around what's happened over the past three months is we've gone from a situation where strong economy, higher stock prices, and the thought was inflation's coming down and the Fed's going to cut six times.

Now, I think reality is setting in that the only way to get inflation to really come down is if the economy slows down. And the idea that we can get rising stock prices, a strong economy, and inflation to get sustainably. You want it all. Do you want it all, Eric? At two percent is really just, you know, not that realistic and very unlikely to happen. So it is. I thought you were saying that's what's going to happen.

I was like, man, you want to eat the middle porch, the hot porch and the cold porch. No, the thought was that that could be done, and that was part of the rally. Now I think it's coming more towards the realistic scenario for the market, that the only way to actually get inflation down is going to be from an economy that slows down. And so in that case, they would be cutting for the wrong reasons, whereas for the past four or five months, the thought would be that inflation can come down and they'd be coming cutting for the right reasons, not because the economy is slowing.

I think it's a huge difference in terms of what's going on in the equity markets today versus what people were thinking two months ago. All right, Eric, thank you. Brian and Courtney, very quickly, make us smarter. That's what you do best, is help us very quickly. What are we watching for next? What's the big thing next on your radar, Courtney? I think we need to continue to see a strong earning season. And I think we really need to continue to get some more data on inflation right now. It's just in line where

we're not going to be raising. We're not going to be lowering. We need to see which direction that's going over the long run. I'm watching this owner's equivalent rent in the consumer price index, which, of course, is a large component of the CPI, but nobody actually pays. And if you look at rents for homes and other indicators, whether it's CoreLogic, whether it's Zillow, it's already peaked and come down. The owner's equivalent rent has peaked, but hasn't come down much. I think the consumer price index is overstating where inflation is. I don't think we're entering a period of price instability. And so I'm not as concerned about it as investors are where we are today this week.

Because I don't know what Jay Powell, as powerful as he is, can do about car insurance. Right. You can figure that out. Let me know because it's going to remain sticky for a while because what can he do about that? Great conversation, Brian, Courtney, Eric. Thank you both. Thank you all. Thank you.

Thank you. Thank you. All right. By the way, do not miss CNBC's Financial Advisors Summit featuring Courtney Garcia. That is on Wednesday, May 22nd. You can scan that little QR code in the bottom right of your screen or it's probably easier. Go to CNBC events dot com slash F.A. Courtney, thanks for doing that. All right. Let's send it over to Christina Partsenevelos for a look at some of the biggest names heading into the close that are on the move. Christina. Let's start with AbbVie. It's trading lower today, even after the biopharmaceutical company beat Wall Street's first quarter expectations.

But the company's individual portfolios could be what traders are held up on. Both Botox and Juvedern net revenues are actually down year over year. Maybe people are feeling good about their bodies. I don't know. But the overall segment was down 4 percent, as well as the immunology portfolio, which was down almost 4% year over year. You can see AbbVie's shares down almost 5% at this moment. Let's talk about ResMed, on the other hand, is trading handily higher today after topping Wall Street expectations for the fiscal third quarter. The CEO pointed to the double-digit mask and accessories revenue jump, posting a year-over-year increase of 12%.

And that's why you're seeing no big deal. Shares up almost 19%. Brian? Christina, we'll see you in a few minutes. Christina, thank you very much. All right, folks, we're going to take a very, very, very short break. But we are just getting started here on Closing Bell. And up next, you might have heard about it, Alphabet, Google's parent company, surging,

posting a giant beat last night. It's on track to close above $2 trillion for the first time ever. How about that? Big technology's Alex Kantrowitz. Stand by with his take on the first quarter. And what else he is watching. All from Big Tech next week. You watch a closing bell.

And we're back right after this. Welcome back. Pretty good Friday for the stock market. Hope you're having a great Friday wherever in America you are. Everything's green across the board here. The NASDAQ is up more than 2%. Big boost from Microsoft and Alphabet. Amazon's also up. Amazon's earnings are next week.

Microsoft and Alphabet had big numbers last night. And in fact, get this. This is like an RBI. I guess we're going to steal it for this show. Alphabet is headed for its best day since July of 2015. It's on track to close above $2 trillion in market cap for the first time ever. We should call that random but interesting. Here now to talk about that and more is Alex Kantrowitz of Big Technology.

Alex, good to see you on set. Great to see you too. $2 trillion day. I thought search was dead. I thought chat GPT was going to kill Google search. But apparently the market begs the difference. Definitely hasn't yet. I mean, there's everybody worried about the future for Google, but the present always look good. And the present looks real good for Google. I mean, as reacceleration in terms of revenue growth, it issued a dividend.

It has a big stock buyback. Sooner or later, he's taking a hard line against people making trouble inside the company saying no more. You guys got to get out. It's a workplace. It's a job. Exactly. And so all of a sudden, the narrative around Apple start, I mean, around Alphabet starting to shift. People are starting to say this company remains strong. Those worries might come into play, but they're not happening immediately. And now we're looking at it. Two trillion dollars. It truly is. I mean, if you're on the radio, folks, Alphabet, Google is up 10 percent right now. Just a monster move, like we said, best in almost a decade, going back, what, nine and a half years, best day since. It did feel, to your point, without getting into politics of it, Alex, but did feel like you see all these things that are happening at the company and

people are like, oh, Gemini's got these weird search results and it's gotten to whatever. Pichai laying down the hammer. I mean, he's dropping the hammer. It's a place of work. You do work or you go somewhere else. And it feels like that did have a market shift almost. Definitely. He had to change the story.

And I think he understood that. And so what he did was he fired the employees that had taken over. I mean, it's not like they were hanging out in the cafeteria. Or outside the building. They literally took over people's offices. Look, and their job is not to be paid to take over people's offices. You have to do your work. And if you're going to be occupying the cloud CEO's office, you've got to go.

And I think Sundar realized in the past they had tolerated some of these protests, and now he realized, listen, everybody's looking at us as a laggard, right? They talked about this Gemini issue. Best days are behind you, Google. Forget about it, right? Exactly. And until that was turned around, it was going to be trouble for google so today what you have is that narrative is shifting he's thrown the hammer down he's written a memo to the company saying mission first where it's too important of a moment to be distracted and then by the way

delivering these very impressive results where they beat on everything their profit grew by like 30 37 i mean it's the time where they're supposed to be dead. They're not dead. Apple. Now, Apple's having a great week. Apple's having, I think, also its best week of the year. But it was very shaky to begin the year. Don't hear a lot about Apple leadership, Apple management. Haven't seen a lot of Tim Cook lately. What are you hearing around Apple? Well, it's going to have I think it's going to have a rough quarter. I mean, if you look at the, yes, I do. If you look at the independent analysis from IDC, for instance,

they say iPhone shipments might be down 9.6%. iPhone sales down 9.6%. Samsung might be taking the leadership role. Xiaomi is ascendant, right? These are real problems for Apple. iPhone, iPhone's sinking. You have Chinese competition. Down 10% possibly.

That's a huge, that's a monster number. If it's, it's just a report, but IDC is good. They are. And this has happened before, right? It happened in the aftermath of COVID, mid-COVID. So Apple has dealt with these bumps, but they need some positive momentum, right? We have WWDC coming up in June where they're expected to make AI announcements. And I'm real bullish on those announcements. But the company has to report earnings next week. Its revenue has declined, I think, four out of the five or five of the last six quarters. And they need something positive to tell Wall Street. And I don't know if we're going to get it next week. Yeah. And you can see the chart there. I mean, the very far right, the bottom right, that's this week in that little upturn. But overall, stock is well down from its levels in late January. Exactly. That might,

by the way, that might end up being a good thing for them next week because we saw it with Tesla, right? Down so much, a little bit of good news, the stock pops after earnings, even though they miss. So Apple, unlike Meta and the others that have had trouble this year, that have had so much a run up this year that they've been unable to sustain the expectations. Apple might be able to sort of weather this one because of what's happened in the stock over the years. You know, very quickly, I'm not going to ask you to Tesla if you're not prep, but it's kind of amazing. Tesla stock is down a little bit right now. One of their main guys who's been there 18 years, the head of Powertrain, was his title.

Last night, I don't know if you saw it, sold all of his stock. $190 million. He left the company and sold every single dime. When an executive sells everything they own, not some of what they own, right? You want to buy a boat, get it. Sold it all. You take anything away from that? I just think it's Tesla, right?

When you work for Elon Musk, this type of stuff happens. Nobody really leaves. If you're that senior, nobody really leaves on great terms with Elon, right? That's just the way that he works. People at the top ranks get fired, they get replaced immediately, or they leave on bad terms. It is a meat grinder inside Tesla. It's hard to work there. And Elon has pushed people so hard. And that's part of the reason why they've been able to do as well as they have is because of the work culture. But the downside is you anger the top executives. They leave. They sell their stock.

You know, you're not going to feel great about holding stock in a company if your boss doesn't treat you well. I'm not saying this is what happened in this situation. No, it's a macro take. I get it. By the way, I work for a company that I've been there a long time. I gave my resignation. You're out the door in five minutes. Yeah.

Right? No goodbye party like thanks. You're no longer an employee. Exactly. Time to go. A lot of. And by the way, the guy got super rich. Selling 190 million in stock. Right. I hope one day to have that problem. Exactly. Alex Cantor. Really appreciate it, man. Great stuff. Thank you. Thanks for having me. All right. You can walk home, too. It's great. Traffic is terrible today. All right. Up next, trading the turbulence. Top technician John Kolovos is here breaking down the charts, revealing where he sees the S&P 500 headed after what was a great week for the index. Plus, if he thinks further downside might be ahead,

and what you need to be watching for in the charts, John Kolovos, closing bell, next. All right, welcome back. Stocks, the markets, your money, whatever, looking to end the week on a high note. The S&P and the NASDAQ, hard to believe, on pace for their best weeks of the year. Even with yesterday's big drop in the first half of trading, we ended lower. The NASDAQ and S&P are actually on their pace for their best week since November. Wow.

All right, so does that mean that any risk to this rally is officially over? What are the charts telling us? We just talked to fundamentals earlier. Let's go now to the charts. It has John Kolovos, chief technical market strategist at Macro Risk Advisors. He is here at Post 9. All right. You got three charts for you. OK, first one I'm looking at here. And again, I am no chartist, but I can kind of eyeball it. Corrective pullback with risk to 4,800. What are you looking at to see that? Exactly.

This is not a bear market, okay? So this is a correction within an uptrend. The way I'm looking at it is the S&P is going to rally up to around the 50-day moving average, falter a bit, and at least make an undercut low, below the April 19th low. Ultimately, I do think that we could at least risk to 4,800, which is approximately where that rising 200-day moving average resides. In technical geek talk, you know what that's called? It's called an ABC decline. A down, B oversold rally, C washes you out. Are we B? We are in B right now. We are in B, which is the

oversold rally. In fact, one of our guests earlier mentioned RSI and how a relative strength indicator index and how we were down. So it's interesting. Yes, exactly. So with oversold rally. In fact, one of our guests earlier mentioned RSI and how it's relative strength indicator index and how we were down. So it's interesting. Yes, exactly. So with oversold conditions, this is the careful part. So there is a risk with this pullback, right? It should be run of the mill. It should just be, you know, washing out sentiment extremes. It should just be a seasonal sort of thing. But an oversold condition and the way that we currently have is a little bit too deep where I would almost deem it a bad oversold. And that's dependent on or as a result of this heightened macro uncertainty that we have. So support would be $4,800.

Correct. Okay. So let's say you're right. Charts are correct. We go down that and we hit $4,800. Is that a sign to buy? Is that a bounce? Or do we need to watch and see if it holds?

There's confirmation. Right. All else equal, yes, you buy there. The risk here is that, let's say, the 10-year yield not only just gets above 470, it breaks out about 5%. And the charts are still kind of pointing higher. It's not impossible. Exactly right. You break that, then I think we're looking at 4,500 for the S&P,

which would be a proper bear market. It's important. And a lot of people may be kind of semi-paying attention. They're driving, listening on the radio, which we love, by the way, you too. If we break below 4,800, or if the 10-year goes above 5%, you think we could go as low as 4,500. Correct. That's exactly right. And what it will do is it will increase implied volatility across all asset classes. So it just won't be VIX spiking. It will be fixed income spiking.

It will be currency vol spiking. And when that happens, the odds of a left tail event increase significantly, almost about fourfold, right? So like a swoosh of 10% could happen quite rapidly. What is a left tail event? A left tail event. Call it a mini crash. Okay.

Right? That would be the risk if that would happen. So what we need to see to avert that, keep the 10 year under five, keep oil under 90, keep gold under 2400, keep Bitcoin above 60,000. You keep that, then this run of the point above 60, 60, I'm sorry, 60,000. OK, yeah, 60,000. Keep it above that level. Then we this should just be a run of the mill. Isn't it amazing how the yield on the 10-year and oil are almost exactly the same? If you overlaid a chart, we didn't, but if they throw one up, if you look back, I don't know who's leading who, who's walking who, oil or bond yields.

Right, that's the thing that was bothering me all this year, which was like these hawkish macro trends that were staring us in the face. If you follow the charts, yields have been going up all year, oil going up all year, gold going up all these years. And then all of a sudden, the hot CPI print came out. And everyone goes, oh, wait a second. This is important, right? It's all been about rising inflation expectations this year. But now there was a rug pull. I'm not going to, I mean, I don't want to sit here and brag, but I'm going to sit here and brag, which is that if you watch my show, I'm a former commodities trader. A long time ago,

I do oil and everything. I was showing our viewers for months, copper's up, oil's up, aluminum's up, steel's up. And then everyone's shocked when we get a hot inflation print. It's like, wait a minute, every raw commodity, a lot of foods is up. And then everyone's like, what? What? Look at the CRB. Just folks, watch the CRB index. You're welcome. Yeah. So this is the thing, though. If you're going to break the S&P, you've got to break the stocks that matter most, right, which are the technology names, right? The max savings. They're breaking higher. But it's becoming more bifurcated, meaning semis may look like they're about done with their correction, but software stocks aren't.

Okay. I think this is a chart, too, that you've got the macro uncertainty index. And I love this. And one of the reasons I love looking at energy, in particular oil, is oil is global. A barrel of oil, for the most part, is the same in Russia, in India, Brazil, Louisiana. It doesn't matter. It just varies on quality of the crude oil. Macro uncertainty index.

Now, we're low. If I were to do a median there, which I think that's what that dotted line is, we are below that. But we've got a pretty messy situation in Gaza. We've got Iran poking around. We've got some domestic stuff going on. If this goes higher, does that whack the market? Yes, that's right. That's absolutely right. And that's what I was hinting at earlier before. Once it gets higher, and actually the raw figure of this actually has given us the sell signal already. So from a very simple buy and hold

standpoint, you want to be out of the market when that signal gets above that median threshold. We're not there yet. We can throw it back up there. That dotted line, that macro uncertainty index, kind of a sharp spike. And by the way, I'm surprised, honestly, it's not higher. Given everything that's going on. Yeah. I don't need to tell people what's going on. It's Friday.

I don't want to be some bad news dude. Yeah. I don't want to get too bearish either. But to be honest with you, being the old commodity guy, I do think oil over time will be north of $100 and $120. And I think that will eventually put the S&P into a proper bear market. I just think threading the needle to get there, it's just not yet. You think oil is going above $100? Oh, yeah.

Everyone that asks me what I think about oil, I don't know. I think if I knew where oil was going, I'd be richer than I am now. I'd quit this job and go be John Arnold's assistant or something like that. But it's it's ticking up. It is. That's for sure. John Colobos, really appreciate it, man. Thank you very much. Great stuff. Good charts. Loved it. Learned a lot. John, thank you. All right. Up next on Closing Bell, we're going to track the biggest movers in the market. I have a feeling, Christina, I'm going to say Alphabet? I mean, I'm just throwing it out there. Wow. No, I'm not going to state the obvious. And I'm going to say investors losing patience with one company and sales are soaring at one shoe company. Can you guess which one? The hint,

Snoop Dogg. I'll have the answer next. All right, welcome back. The aforementioned Christina Partsenevelis is here and she promises that these are not, these are not the usual, this is not, you know, verbal, can't, these are not the usual suspects. What are you looking at, Christina? Okay, there's one usual suspect in there, but it doesn't get as much attention as the tech names that you talked about. So I'll say that I'm winning in this category, but Intel failing to impress investors with its weaker than expected guidance and promise that the second half of the year would be better.

Shares are down, what, 9% today, down 33% on the year, underperforming the SMH, which is a great barometer for semiconductors as a whole. Bernstein calling the company, quote, profoundly broken. Rosenblatt saying they're losing confidence, even as Intel management called for a bottom last quarter. Shares, you can see, again, down 9%. Did you guess the shoe company, Brian? Skechers, faring much better. Shares hit an all-time high after record quarter earnings. Q1 sales are up 13% year-over-year, driven by the

direct-to-consumer sales channel, which has higher margins than going through a wholesaler. So, you know, kill the middleman. The company guides for higher sales growth in Q2, driven by an international expansion in Europe. I bet also those Snoop Dogg sketcher ads were helping. And during the commercial break, you should have seen me because I was just playing Snoop Dogg songs. Back to you, Brian. Which one? Well, drop it like it's hot.

And I can't sing it because you're not legally allowed for me to say anything, but, you know, or sip and have gin and juice. Fair use violations, right? Yeah. We're going to get in trouble. Well, they would appreciate you in the LBC, Christina, from the hard streets of Montreal's suburbs. Christina, thank you very much. All right.

Still ahead. NIO shares powering higher today. We're going to tell you what is behind the pop and how the rest of the China-based EV makers are reacting. All that coming up. You've got 15 more minutes with me, folks. Lucky you. We're back after this. Go back.

Tonight on Last Call, do not miss Hayman Capital Management's Kyle Bass. I'm not going to miss the show. I tell you what, I will tune in for that interview. Kyle Bass, last call, 7 p.m. Pacific, 4 p.m. Eastern time. Talk about the markets, maybe a little bit about the dollar, geomacro. Hit me up on Twitter. Let me know what you want to talk about. At Sully, CNBC. All right, coming up on Closing Bell, Snap shares surging.

I actually got that out because she sells seashells or something. Stock is up 28%. We caught up with CEO Evan Spiegel and got his take on the quarter, those comments, and more. We take you inside. What else? The Market Zone. All right, we are now in the closing bell Market Zone. Ned Davis Research's Ed Klishold is here to break down the crucial moments of the day.

Julia Borsten on Snap's best day in more than two years. And Phil LeBeau on why NIO is leading the EV makers higher. Ed, we're going to start with you. You guys do this crowd sentiment index. It had its third longest run of all time. It was topped out until this week. Evidently, it called the market correctly. What are you seeing now?

Yeah, so what this sentiment composite is, it's seven different sentiment indicators like put-call ratios, polls of individual and institutional investors. And so it was very high. We call it the excessive optimism zone for about 20 weeks. And the challenge for sentiment is that it can stay high for a long time. So you never really know until it starts to reverse. And that's what happened this week on the recent pullback. Actually, it signaled last week, to be technical about it. But when you look at previous periods when you've been in this optimism zone for a while, it doesn't mean a major market top necessarily. What it means is for the next couple of three months, gains are kind of mixed to a little bit weak. And so we just need to maybe take a pause here while we

work off some of the exuberance that had gotten to the market after what was a historic run for five months. A 25% gain over five months is practically unheard of. Yeah. So, I mean, put that into context. I said third longest, but again, I'm not sure that told the whole story of just how strong or how crowded this market had been. Yeah. So you look at some of the other ones like the longest one was ended at the end of 2021 when you went into a bear market in 2022. The other one was the one that ended in early 2018. And what happened then? We had Valmageddon, if you remember that. There's inverted VIX ETFs that had gotten to overrun the VIX futures market. And when that broke, you had a 10% pullback in the market.

And right now, there are actually quite a few ETFs out there that do the similar things, not necessarily with VIX, but suppress volatility. And so when volatility breaks to the upside, that could be something to keep an eye on as well for maybe a pullback to turn to something a little bit more than that, just because all the derivatives out there, when they start working against you, it can be violent. Yeah. What's next? What are you looking for next in the market, Ed? What's the next big signal? Yeah. So I think we really need to focus on earnings because the Fed's story has pretty much played out. If you look at what happened historically when the Fed has raised rates quickly, like the market was priced in the beginning of the year, the market has actually done poorly. When the Fed has cut rates slowly, like the market is pricing it now, the market

does pretty well, but that story is already priced in. So now it's about earnings. Can companies actually produce the expectations that the market has put upon them? And it looks like early in this earnings season, they've done that. Over 83% of companies that have reported so far have beaten expectations. That's historically a pretty high number. We'll see if they can continue to do so. But it's going to be about earnings in 2024 coming through.

That's going to determine just how strong this market is. All right, there you go. Great stuff, Ed Clissow. Thank you very much. Now let's talk about Snap. Julia Boorstin, did I read that right or am I just slowly going crazy? Is Snap having its best day in two years? That's right.

Snap shares are now up about 28 percent today on better than expected results and guidance reported after the bell yesterday. Now, for the first time, the company issued a full year expense outlook, which shows stabilizing expense growth. This driving a number of upgrades and positive analysts notes, though some are a little bit more cautious. Wells Fargo saying Snap is showing signs of progress, but that they, quote, likely need several solid quarters to rebuild confidence in the Snap recovery story.

I spoke to Snap CEO Evan Spiegel earlier today on Money Movers. Here's what he said about advertising demand. Businesses are using digital advertising to really efficiently drive more demand. And I think, you know, overall, the economy has remained healthy. The consumer has remained confident and still spending. So I think net net, you know, it's a constructive backdrop for the advertising business. Spiegel also stressed how the company's investments in AI

for content recommendation, as well as advertising, are paying off with these better results in the quarter. Brian? All right. Julie Boorstin, big day there at Snap. Huge day. Thank you. All right, let's get out of Philip Bo. Phil, NIO, the big Chinese-owned EV maker, what's going on there and what's happening with the whole space?

Well, you've got the Beijing Auto Show going on right now. This is the time companies like NIO make announcements regarding new models. And that's the reason why shares of NIO got a bit of a pop today, moving up more than 8 percent after the company outlined its new car plan. Specifically, the company is going to be introducing a lower price, more affordable electric SUV. Now, they're looking to come in under the Model Y. So conversion price, about $35,000. This is going to be sold in China. So let's make it clear, this is not going to be sold anywhere else but China at this point. Brand name will be Ladao, mid-May launch.

As you take a look at shares of NIO and Xpeng, Xpeng also out announcing it's going to be rolling out a more affordably priced SUV. This is what we're seeing, Brian, the continuation of what has happened for some time, Chinese automakers continuing to cut prices. And because of that, you see further pressure on anybody in the EV space in that country. Is there any clear indication? And if you've said this in the past, I'm sure you have. I apologize of when we might start to see some of these or the B.Y.D.'s or whatever on U.S. roads. No indication. Look, if they wanted to try to sell over here, they could easily do that. They would have to pay the 25 percent tariff to sell them over here in the United States. They're not feeling comfortable about the situation at this point for a lot of

different reasons. So there's no indication when that'll happen. The expectation, though, Brian, is sometime within the next five years, you will start to see Chinese autos sold here in the United States. Yeah, crazy. The tariffs. I mean, it seems to me, Phil, that that's going to be an epic fight. Right. We talk a lot about the president and the UAW and union support and these cars. These cars are scaring a lot of people. Yeah, they're coming. Look, and it's not just EVs, Brian. I know we like to talk about EVs on CNBC. Yeah. Look at the internal combustion engine market. That's where the Chinese are flooding the world with cheaper market. That's where the Chinese are flooding the

world with cheaper vehicles. That's where the real impact is happening right now. That's a great point. I know you're right. We do talk a lot because that's the future, Phil. We're supposed to talk about the future, not the past. Phil LeBeau on Neo. Yeah, combustion engines, folks, they still exist. Phil LeBeau, really do appreciate that. All right. So we got about 25 seconds, kind of random of random but interesting got a company going public here today gcts which is a semiconductor fabulous semiconductor company and i come in and my buddy is up there jeff tudor on the board of the company shout out to champ deli around the corner. You're at the NYT. Go see these nice people at Champ. See you tonight. John and Morgan, up now.