Closing Bell - Closing Bell: Stocks rally, Meta’s mega rebound, White House weighs in on GDP miss 4/28/22

Episode Date: April 28, 2022

Stocks surged in another choppy session, with the Nasdaq finishing the day higher by more than 3%. Meta shareholder Barbara Doran and Wedbush analyst Ygal Arounian discuss whether or not the Facebook parent’s results are an all-clear signal for tech. The rally came even as the latest GDP numbers showed an unexpected contraction in the first quarter. Heather Boushey from the Council of Economic Advisers discusses if it’s a signal of a coming recession.

Stocks are surging on another choppy session here on Wall Street. We are at the highs of the day. Will the rally hold into the close? The most important hour of trading starts now. Welcome, everyone, to Closing Bell. I'm Sarah Eisen. Take a look at where we stand in the market, up more than 600 points on the Dow. In fact, S&P is having its best day in about six weeks, up 2.7%. Look at the Nasdaq really climbing back today, 3.3%. We're actually now positive for the week after all that.

Small caps up 2%. Check out the most actively traded names this hour here at the New York Stock Exchange. Tells you a lot about the mood right now. We've got Ford, number one, probably because Ryan Reynolds picked it in his second pick. Maybe something to do with earnings as well. Teladoc getting slammed down 41%. That's why the ARK Innovation Fund is red, despite the comeback in the Nasdaq. Nokia, AT&T, and NIO.

High volumes on all those names. Coming up on today's show, Hershey CEO Michelle Buck, whose stock has been a stealth winner this year. We'll talk about today's earnings results, what she sees in terms of consumer spending, and, of course, inflation. Plus, Council of Economic Advisors member Heather Boucher will join us from the White House with their response to today's unexpected GDP contraction, whether or not it signals a looming recession. Let's get straight to our top story. Tech making a comeback, meta surging on earnings, sending the Nasdaq sharply higher. So do the results mark an all clear moment for the group? Joining us is Barbara Duran from BDA Capital

Partners, Igal Arunian from Wedbush Securities. Barbara, you were buying Facebook or Meta yesterday into the earnings results, right? Why did you have faith? It's still down 38% this year. So we'll put it in context, but nice move. Yeah, well, I've owned Facebook and all the accounts that I managed for a long time, and I I had some new cash in. We have days it really ties into the broader market you have down nine hundred points on a Friday. Follow through on Monday and then Tuesday. And

everything's getting sold tells me there are opportunities everywhere. So really I bought on the opening yesterday morning saying the downside is limited from here dangerous going into earnings given their last earnings. You know that

they users were down. He talked all these costs that people weren't expecting, but I thought the risk reward in a 13 PE and down so much on the year, it's probably not a, not a bad risk to take. So I did add, and thank goodness, you know, my, my stock pick was rewarded there. Did you agree, Gal? It wasn't a perfect quarter. Yes, we did see user growth, but revenues were a miss, and it's the slowest growth we've seen from Facebook in a while. Yeah, it wasn't a perfect quarter at all. But I think what we saw was that it was bad,

but not as bad as people feared, and certainly could have been worse. It did feel a little bit like like a clearing event- for for meta and for Facebook- you know the macros impacting everyone- so that's that's going to be there that's going to linger on for at least a

couple quarters. Of all what we also saw was that some of the some of the biggest factors that weighed on them last quarter- like the- the sequential decline in user growth and competition from tick tock- As well as the

pressures from Apple's privacy initiatives- it really got much better but they didn't get worse and I think that's what the expectations were headed into the print. That they would get worse or that's what the fears were. And that's not what

happened- so that's I think that's why shares are reacting the way they are today. But you're still on neutral for the stock why. Yeah we're But you're still on neutral for the stock. Why? Yeah, we're still on neutral. Again, some of those things got answered, I think, in the near term. I don't think competition from TikTok is going away.

Certainly the risks from IDFA and Apple are better understood, and I think that's a good checkmark for the stock. There are still some real big macro risks right now, and I think there's still a lot of uncertainty in the macro. And that can really pressure shares potentially in the coming months and quarters. So that's something we're keeping an eye on. We've seen that as a theme for Alphabet as well, which is coming back for Snap, which is coming back. A big sort of sigh of relief moment today. But Barbara, you've been buying a lot of these names. You've got Amazon and Apple after the close today. I think you've been also nibbling

there, even though you've owned these stocks for a while. I have. And I think, you know, Ekal's right about the macro uncertainty. So I think we have had nothing but volatility since the start of the year and every month, big drawdowns. And when we've had moments like this last week, then I add. I the volatility is probably not over until I think we see peak inflation numbers when we are convinced it's coming down because I think right now the

fed is still driving the market they have really made it clear their focus is to tame inflation. And you know even though I think a lot is in the market at this point. I think until we have better visibility and also the Ukraine situation

is it's not helpful- I think we will continue to see volatility so these stocks could come right back but I think that. You know buying in here I think you are pretty much near the lows and a year out again if your investor you look at a year out.

And a lot of these companies. Made this digital transformation is real and lasting and I think what these earnings are showing aside from net Netflix which has- particular problems in terms of competition. You know, they are here for the duration and they are still the leaders and still doing quite well. So are you saying, Barbara, just want to

clarify that that for tech to really work as a group, for this group to work again and see any kind of market leadership, we need to have seen inflation peaked. Is that the direct tie? Yeah, I think so. And I think, you know, because we know that really the higher inflation and higher interest rates go, the more we have to discount future earnings. But I think we're pretty close to that. So that's why the risk reward these stocks have gotten, in my view, there's been a major repricing and a major reset and in some cases a bit oversold. So I think, again, the risk rewardreward here is good. But patience can be rewarded. Take your moments.

Got it. Egal, if that is the case, if inflation does peak, if we start to see an embrace of this group again, which one of all the names that you cover within digital ads do you like the best in terms of risk and reward? Because now you've got your pick. The valuations have come down. Valuations have come down, and there are plenty of things to pick from. Within digital ads, it's still got to you've got your pick. The valuations have come down. Valuations have come down and there are

plenty of things to pick from within digital ads. It's still got to be Google. You know, what what what Alphabet, Google have done with with the search business has just really been phenomenal. They've created a product that was great to begin with, have really improved on. And then you've got the cloud business, which is even less exposed to the macro than the advertising piece. That gives them a good backstop. The cloud space has been doing really well. You saw that in Microsoft's results as well.

Expecting we'd see that in Amazon today as well. And cloud bolsters that ad business. I think it puts Google in the best spot. Well, getting bought today after a sell-off of earnings yesterday. Egal, Barbara, thank you very much for joining us. Appreciate it. Thank you. Take a look at the market. We are zooming higher right now. 718 points on the Dow. The S&P up 2.8%. That is making for its best day since May 2020. Yes, we've had a lot of the worst days since back in 2020, but today is a big comeback moment. We are now higher for the week.

We've got much more on this market rally throughout the show for you. Also up next, Hershey. It's been a stealth winner all year long, up 17% in 2022. Climbing again today on the back of strong earnings, we'll talk to the CEO, Michelle Buck, about what's driving the strength and whether inflation will take a bite out of future results and the economy. You're watching Closing Bell on CNBC. Big rally day. S&P up 2.8 percent. Check out today's stealth mover. It's PTC Inc.,

a software and services company which deals in AR, computer-aided design, and the Internet of things. And it is at the very top of the S&P 500 today after earnings and revenue handily beat estimates. Guidance strong as well. It's been an outperformer pretty much all year. But today at the top, besting Meta right behind it and PayPal, both which have been big losers this year and big winners today on earnings. Speaking of stealth movers, look at shares of Hershey. The stock trading near all-time highs after announcing an earnings beat and raising its guidance. It's been an outperformer among the industry, up 17 percent for the year.

The consumer staples sector overall up 3 percent. Joining us is Hershey CEO Michelle Buck. Michelle, welcome. Good to see you. Thank you. Great to see you, too. I think what stood out most in this report is that you raised earnings guidance, which we have not seen from the food and beverage industry. What gives you the confidence in this environment with costs so high to do that? Well, I think it started with the tremendous strength we had in Q1 with net sales up 16 percent and EPS up 32 percent. That was just a really strong start to the year. And we didn't see as great a price elasticity impact on the business as we had anticipated. But strong demand across our U.S. confection business, international and our snacking business.

So you didn't see strong elasticity, which which which is what we're hearing, really, that the consumer is absorbing these higher prices. How much does that last? Where does that go from here? There's got to be a point at which the consumer pushes back, especially if we slow down. You know, on a daily basis, we really work hard to balance value for our consumers, our customers, our employees, and our shareholders. And confection and snacking as a category has always been a place that's pretty accessible, somewhat of an affordable luxury. And we've worked hard to make sure we keep it that way. So we have about 25 percent of our portfolio at retail price points of two dollars or less. And that really enables any consumer,

all consumers to participate in the category, even during inflationary times. We're taking a look at your portfolio right now, which is vast. I know you said confectionery, the sweets are what really worked this quarter. I saw there was also double digit growth in Skinny Pop, I think Pirate's Booty as well. What sort of changes are you seeing in behavior from consumers as we do go out and travel again? I know you were on top of it during the pandemic, shifting to s'mores as everyone was home. What are you seeing now? Yes, and right now we're seeing a blend of mobility where our instant consumables and our convenience store business are thriving.

And then we're also seeing those at-home occasions. I think consumers are really connecting with the brands that they love, that give them comfort over time. And we've continued to expand our businesses into new packaging types that allow us to play at different occasions so that we've got small bags and small units across snacking for mobility. And then we've got the bigger consumption for at-home snacking. We also have had a huge opportunity to expand distribution and household penetration, particularly on our salty snacking businesses, Skinny Pop and Dots Pretzels, which is on fire. And Michelle, what is happening on the cost side of things? I know cocoa maybe hasn't had quite the spike as some of the other commodities, but you have to pay for oils and dairy and packaging.

What's the outlook there for how bad it is and how long it's going to last? Yeah, we're certainly navigating this inflationary environment where we've seen the biggest impact of cost on our business is where we either can't or don't hedge. And specifically for us, that's been around dairy oils in particular. And the Ukraine situation has exacerbated that with cooking oils, also with packaging and logistics costs driven by overall oil prices. Is it getting worse? I mean, I'd say it took a step worse with the Ukraine-Russia situation, clearly. And I think as that has broader impacts in other markets, I think there will be some continued pressure there. Got it. Michelle Buck, we appreciate you coming on to talk about all of it.

Thanks very much. CEO of Hershey's, which is up another 2 percent today. Let's check in on the market right now. Very strong and very broad rally. Best day we're looking at since May 2020 for the S&P, which is up 2.7%. The Dow rallying by almost 700 points. The Nasdaq seeing the most love up 3.3%. Nasdaq 100 up even more than that, almost 4%. Coming up, the latest read on investor sentiment just out, and it's a doozy. Mike Santoli here to break down his dashboard next. As we head to break, check out some of today's top search tickers on CNBC.com.

Meta leads the charge today, unseating the 10-year yield. Wow. Meta's up 18% off of earnings. We've also got Tesla, Teladoc, which is down still 41 almost percent. And Apple ahead of results after the bell today, up four and a half percent. We'll be right back. Nice comeback rally today. The Dow is up more than 700 points right now, but overall, April is still shaping up to be a volatile and down month for stocks. The S&P 500 is on track for its worst month since March 2020. Depths of pandemic. Mike Santoli, the Ryan Reynolds of closing bell, taking a look at how this. I don't even know what the implications are there.

It's good. OK, it is. OK. Is the real Gen X millennial divide is those who think that Ryan Reynolds is more famous than David Robinson or those like me who think David Robinson is more famous than Ryan Reynolds of the stock draft people? Which tells me. You're probably right.

Tells you about me. My time has passed. I'm a fan of his. It's all about him today. But Mike, tell us about sentiment. It's pretty depressing. In fact, it probably partially explains why the market was primed to have this kind of upside jolt like we got today. In fact, historically negative. The American Association of Individual Investors weekly poll, we track it a lot. It's been very low, less than 20% saying they were bullish. Here's the difference between bulls and bears.

Bearishness was up almost near 60%. I mean, the only time or the last time we were this low was basically at the March 2009 lows of the market. So clearly, it's a contrarian indicator at extremes. We can explain it away partially. We can say it's not a scientific poll. We can say in general that it really just coincides with the market being weak. But I would argue the S&P 500 has only been down 13 percent. It's nothing like March 2009. Obviously, inflation hurts. Obviously, bonds being weak at the same time stocks are wears on sentiment. The forward implications tend to be

positive for stocks when you get to this point on a multi-month basis. Can I tell you I'm a little disappointed? I thought the dashboard today should be on the dollar yen because yesterday you hit the dollar dashboard. I think we need to hit the dollar yen today because huge news today overnight, the Bank of Japan basically reaffirmed its commitment to low interest rates, buying bonds, easing, and a weaker yen. And guess what? That gave traders the green light to keep selling the yen. It reached 130 U.S. dollar to Japanese yen. We haven't seen that since 2002. It is a dramatic weakening of the currency. And we cannot even go to Japan to take advantage because they have so many travel restrictions because of COVID. Not helping consumers, obviously, travelers. You know, it's coming at the same time that, you know, the dollar's turbocharged from multiple directions, as we said yesterday. Obviously,

euro against the Chinese currency, too. What's interesting, though, is, as of course you know, you know, a weak yen normally, it's kind of like green light for risk-taking. It's happening for different reasons this time. It's, you know, a little more complicated interpretation than just, you know, people are looking for risk. Well, people like a weaker yen. It's a signal for risk-taking. It's a funding currency. But whenever you have a currency move so far so fast, then it sets off alarm bells. And the question is, is this a canary in the coal mine for other maybe emerging markets, currencies? The Fed is embarking here on a really aggressive, for them and for the rest of the world, tightening cycle.

And that drives money into the U.S., money into the U.S. dollar. We've started to see the impact of it in earnings. That's all true. I do wonder, though, historically when the tightening cycle actually gets going, in other words, the dollar usually strengthens into the beginning of it. We'll see if it maybe looks a little bit overbought and get some relief there. Well, it is tightening financial conditions. For sure. As you say. Thank you for the double dashboard.

You did it. Ryan Reynolds, Mike Santoli, blushing. He hasn't even completed his acquisition of Twitter yet, but Elon Musk may already be eyeing his next takeover target. And this one might be a bridge too far, even for the world's richest person. That's next. What is Wall Street buzzing about? What is Elon Musk going to buy next? world's richest person. That's next. What is Wall Street buzzing about? What is Elon Musk going to buy next? Even he's joking

about it, tweeting, next I'm buying Coca-Cola to put the cocaine back in. Remember, originally Coke was invented in 1885 and the original formula did have cocaine. It was meant to cure ailments. Cocaine was legal and common then, but got phased out of the drink around the turn of the century. Even if Musk was serious about buying Coke, he can't afford it, likely. Coke's market cap is $285 billion. That's before any acquisition premium. The stock is near all time highs as it's a defensive play in a volatile environment. And it's turned around the business and innovated away from soda. Earnings this week were strong. $285 billion. Musk may be the richest man in the world, but that fortune stands at $253 billion. And he's just committed $21 billion in

cash for his $44 billion takeover of Twitter. Also, Warren Buffett's Berkshire Hathaway owns about 9% of Coca-Cola. Also, as Mike Sangioli flagged to me this morning, the political and investor backlash would be huge. State pension fund owners of this stock would complain, likely a political mess in every state where Coke operates. I reached out to Coca-Cola for comment. No response. I don't think they want to justify it with a response.

And as unlikely as it is, and it may be, many are pointing to Musk joking about buying Twitter back in 2017 in an exchange. Where else? On Twitter, in which Elon said, I love Twitter. And someone responded, you should buy it. To which Elon responded, how much is it? Not such a joke after all. Coca-Cola shares up again today. Less than one percent. Here's where we stand overall in the markets. Higher across the board. And we've been building those gains here into the close. S&P stands right now up almost 3%. Look at the Nasdaq roaring back up 3.5%.

Best days for the market here since 2020. Small caps also joining the party up 2.3%. Rallying off a slew of earnings like a Meta and a PayPal at the top of the market. Also got a negative print on GDP. Up next, the White House Council of Economic Advisors member Heather Boucher will join us to talk about whether that unexpected economic contraction is a signal of recession on the horizon. And you can listen to Closing Bell on the go by following the Closing Bell podcast on your favorite podcast app. We will be right back with the Dow up 730 points. U.S. GDP actually shrank at 1.4 percent in the first quarter. That

was below analysts' expectations of a 1 percent gain. The Commerce Department saying this morning the decline reflects a decrease in private inventory investment, exports, and federal and local government spending. Joining us here first on CNBC is the Council of Economic Advisors member Heather Boucher. Heather, it's great to have you back on the show. So it's not a reflection poorly on the consumer. That is still going strong. But it was a big surprise to see a negative ahead of that number. How worrisome is that to you? Well, here's the thing. First off, at the Council of Economic Advisors, we try not to make too big of a deal about any one number. We always want to look under the hood and look at the context. And when you do that with this data,

there is a lot of strength underlying that, that is underpinning that negative number, that 1.4%. So first off, we did see strong consumer spending. You know, consumer spending is 70% of the U.S. economy. So that 2.7% increase in consumer spending, certainly an indicator of strength. We also saw over a 9% increase in business investment, alongside an increase in residential investment as well. We know from prior economic research and indeed from earlier Council of Economic Advisers teams that when those indicators go up, consumer spending and real investment, that actually is more

indicative of what growth is going to be in the months and quarters to come. So that is certainly good news, that sign of strength. And of course, we see that in other parts of the economy. We have this very strong labor market, unemployment at 3.6 percent. Seventeen states have unemployment rates that are at historic lows or tied. So you can see that strength reflected in some of these underlying numbers underneath Seventeen states have unemployment rates that are at historic lows or tied. So you can see that strength reflected in some of these underlying numbers underneath that headline negative number.

I get that. But it also shows you that trade is an important part of our economy. And net exports were a big subtraction here on growth. The problem, Heather, is that the dollar continues to strengthen, which hurts our exports, and global growth continues to weaken here with all of these uncertainties. So how problematic is that for U.S. growth? Certainly. I mean, that was a number that was more of a drag on growth than forecasters had expected. But one of the other things about last year is that in 2021, we added 365,000 jobs in manufacturing in the United States,

the fastest growth in manufacturing in about three decades. So there are also signs of growth, of strength there in U.S. manufacturing. And, of course, we know that, you know, coming out of this historic pandemic, the United States has had stronger growth. We have this stronger consumer, stronger household balance sheets in other countries. And that is, I think, reflected in this number that the American consumer is buying a lot of stuff that consumers abroad just are not ready to buy yet because of the ongoing challenges with the supply chains and the pandemic. So, you know, I think when you put those together, it's certainly something that we're going to keep watching, but it is not in and of itself an indicator of something quite dire.

Is the dollar getting too strong for comfort here? If you look at the effect on exports and earnings as we've been hitting multi-year highs against a number of major trading partners? Well, certainly that is always an issue when you're thinking about trade. And of course, given the challenges in the global environment right now and the uncertainties, it is not surprising to see the strength in the dollar. But again, we are focused on the core strengths of the U.S. economy. Where are those? Where do we see them? And I think that this report today does show that that strong business investment, that strong consumer really can help keep us propelling forward. Let me add one other statistic today from a new White House report that documents how last year we saw more small business startups in America than at any point on record,

a 20 percent increase from the year before. So, again, these are other signs of resiliency and domestic strength. It's good news, but something that investors are worried about here, Heather, is that the Fed is about to embark on a pretty aggressive tightening cycle. Yes, they've already started. They went small and now they're expected to go bigger to fight this inflationary problem that we have. So I guess the question is, has the Fed ever embarked on a tightening cycle like that with negative economic growth? And what happens?

Well, here's the thing. I will leave the Fed's decisions to the Feds. We do not comment on Fed policy. But, you know, they will look at all the data and assess the ongoing strengths and weaknesses of the U.S. economy and their role in fighting inflation. But one of the things that we've known is that recovering from a historic pandemic was never going to be easy. And we had a big hole to dig out of. So one of the things we see is you, if you look year over year, growth is about 3.5, 3.6 percent higher in this quarter than it was last year. So that is still a sign of ongoing strength, even though we have this quarter and quarter decline. And that is because we've been digging ourselves out of this pandemic and trying to find

the right pace and speed to do that. So I leave it to the Fed, again, to make those decisions. But there's a lot of new data for them to consider today. Yep, they've got a decision next week. Heather Boucher, thank you for joining us from the White House today. Thank you. Appreciate it. Look at Teladoc plunging after slashing its outlook. But other big stay at home stocks aren't getting hit by that news. That story, plus a countdown to earnings from Apple, Amazon and Intel when we take you straight inside the market zone. Dow's up about 660 points or so. We'll be right back. We are now in the closing bell market zone. CNBC Senior Markets Commentator Mike Santoli here to break down the crucial moments of the trading day as always. Plus, Julia Boorstin is here on

Meta's big comeback day. Bernstein, Stacey Raskin on what he expects from Intel earnings and much more. Let's hit stocks which are rallying into the close near session highs. All 11 sectors right now are in the green. The Nasdaq is really coming back up 3.3 percent. And the difference, Mike, today is we've seen some other rally attempts this week, like yesterday, and that did not hold. This one appears to hold its earnings because you're seeing a meta and a PayPal at the top of the market. And I do wonder if that negative GDP number is working its way in in some way to the idea that maybe inflation is peaking, maybe the Fed can't be as aggressive as it originally expected? What do you think? Is it changing expectations?

I don't know. It's not evident if you look at the bond market where it would be very sensitive to that. One thing I would be very accepting of is the idea that the negative real GDP print at the headline level at least did nothing to cause the market to break down below the recent lows, which have been scraping right along the bottom of this trading range. So you mentioned the failed rally yesterday. It's almost as if they have to have all these kind of gears slipping on previous rallies. People lose an expectation we're going to be up. The S&P was down 8 percent just about for the month coming into today, into the final two days of the month. Historically, that usually just means

you're going to get a little bit of mechanical buying. What we are right now is basically going back to Monday's closing level on the S&P. So it's the start of something perhaps, but certainly didn't decide anything in a final way. And we didn't break below the March closing low. That's right. Right. How important is that as we look at an S&P, which is unbelievably now higher for the week heading into Friday? It enables you to just continue to treat this as a volatile trading range market for now. I mean, it's subject to change. People will tell you it's kind of in an underlying downtrend, maybe so. But so far, this whole area, once a month, we've visited this general vicinity and the market hasn't yet busted below it. Now,

obviously, the last time in January earnings season, it was on the Friday. We finally got clear of all the big tech earnings and the market was able to have a fairly decent bounce. You had a 7 percent bounce off this level. You had a 10% bounce off this level. And guess what? They didn't hold either. So that's what a trading range feels and looks like. We've got a lot of sectors higher today. You've got a travel theme, a stay-at-home theme. The semiconductors are leading the market. Technology is the best performing sector right now. That stay-at-home darling, though, there is a bust among it, and that is Teladoc, on track for its worst day ever after

the company reported weaker than expected revenue guidance, prompting at least six Wall Street firms to downgrade that stock today. ARK Invest CEO Kathy Wood had taken a big bet, remember, on Teladoc. It's the third largest holding in her ARK Innovation ETF. It's why the fund, the ETF is down today. But Teladoc's plunge isn't dragging on other stay-at-home winners. We're talking stocks like Shopify, DoorDash, Zoom. They're all rallying today, Mike, and they've all been beaten up hard. What do you make of the divergence? Yeah, I mean, you know, with Teladoc, there was such a big radical downscaling of revenue expectations and everybody piled on. So this is a give-up trade for this one particular name. The rest of the stocks in this general category have been

beaten up so much that essentially the market is getting a lift. People are obviously getting chased out of some short positions. And I would point out, speaking of the ARK funds, I mean, Tesla is also marginally down on the day and was down more earlier. So that also is contributing right there. The Teladoc numbers, one strand of it is interesting and it has been an emerging theme, which is how expensive it's become to advertise digitally, to acquire customers through digital ads. It's become less effective from the Apple reasons and prices are just higher. And so all these companies burning a lot of the capital they've raised in that way, it's just become a lot lower return to do that. So I think

people are on the hunt for other companies in that general category. Twitter, by the way, you mentioned Tesla down. Twitter's up 1.2 percent, but it is still below $50 a share and sort of moved a little bit away, farther away yesterday from that $54.20 that Elon Musk's takeover bid is. More on that soon. Meta is the biggest winner on the S&P 500, though, after reporting better than expected earnings, thanks to a rebound in daily active users. Average revenue per user also came in better than Wall Street was expecting, although the social media giant did miss on sales and on monthly active user expectations. Julia Borsten joins us. Julia, Meta did miss on several counts, lower revenue than expected,

slower growth for your monthly users. What are the factors that are making the stock soar right now? It's a big move, but still down a lot for the year. Yeah, it's a big move, especially if you consider, Sarah, that looking at the second quarter and Meta's guidance for the second quarter. If they are at the bottom end of the guidance, they actually could be having lower revenue in the second quarter than they did last year. But I think the reason why we're seeing the stock up so much today is re-accelerating daily active user growth. It really hurt the stock that daily active users declined last quarter. Also, a lot of conversation about how Reels, now responsible for 20 percent

of the time that some people are spending on these apps has massive potential for monetization, and they are not making that much money from that time spent just yet. So potential in the future. And also, I think investors like the fact that Mark Zuckerberg is more cautious about spending on the big long-term bets. He said that because their revenue growth has slowed, they are going to be pulling back their near term investments in these long term bets and things such as the metaverse. So that I was I was going to ask you about that, because I guess Wall Street would take that as a positive, especially to be prudent in this kind of environment, especially when growth is slowing. But on the other hand, you know, this stock is such a

transition play. They've they've rebranded asa. They're focusing on the Metaverse. What stood out to me, another number, which is 97 percent, sorry, 97 and a half percent. That's how much of their revenue is from their apps, Facebook, Instagram, WhatsApp. That's the whole business here. So how are investors viewing the whole Metaverse and the transition as a play on the stock? Well, I think that, yeah, I mean, I think it was interesting hearing Mark Zuckerberg sound kind of practical. He said, look, we're investing these long-term projects for 2030. But he said, you know, the metaverse play is a 2030 play. And in the meantime, they're going to be trying to generate more revenue through things like reels, trying to make sure that they're, you know, continuing to adapt to these Apple operating system changes.

They talked about regulatory challenges, but really not focusing on the 2030 numbers so much so because they understand that their revenue is not growing fast. They might actually have declining revenue next quarter. So they need to be more pragmatic. And I think Wall Street seems to really like that if you look at the stock up nearly 18 percent. Yeah. Another pivot for Facebook as it's done in history. Julia, before you go, I want to ask you about Snap, which is also jumping. The company had its annual partner summit. What is the news here? A number of pieces of news. Snap announcing 20% growth in monthly active users in the past year to 600 million. Also announcing that over 2.5 million augmented reality lenses

have been viewed over 5 trillion times. This is the company reveals a new lens cloud. Those are free backend services for AR developers, also announcing new tools to make it easy for brands to create AR shopping lenses and ads, saying that more than 250 million Snapchatters have engaged in AR shopping just in the past year or so. The company also unveiling this flying camera called the Pixie. It captures

photos and videos and it costs at two starts. The cost starts at two hundred and thirty dollars with some add on costs there as well. Snap also announcing it's partnering with Live Nation to bring augmented reality to concerts. And I will be interviewing Snap CEO Evan Spiegel about all this and more tomorrow. That will be exclusively in Tech Tech. Sarah? Looking forward to that interview. I feel like that's a safety hazard, the whole flying camera. I guess that's why they advertise it outside. Julia, thank you. Julia Borson. Intel is rising today as well ahead of its quarterly results due after the bell. The stock, though, it's down about 9% in 2022, but outperforming the broader semi-sector.

Joining us now, Stacey Raskin, Bernstein Research Senior Semiconductor Analyst. Stacey, I think you hate this stock still. Am I right? I hate the stock. Look, we're underperforming on the stock. We're underperforming on the stock, yes. Hate is a strong... Why? It's outperformed the market, as I mentioned. Sort of considered maybe a value play within the overall semi-index.

What do you like? It's outperformed. Like, year-to-year, it's been horrendous, right? And I think for good reasons. So you ask, like, what is it that we don't like? I think there are tactical as well as structural worries. The tactical worries, look, PCs are starting to show that they're maybe rolling over and people worry about consumer spending. We got lockdowns in China and everything else.

And the company has still been calling for PC growth, not just this year, but in the long term. I think that is an assumption that's hugely up for debate. More structurally, like everything is still there. They're still losing share. They admitted at the analyst day that AMD basically has open season, especially in data center, at least for the next couple of years. Their CapEx is going up massively. Their gross margins are coming down.

Their free cash flow is nonexistent. And it's like, you know, it's a five year story at this point. Like we already know what they're going to do, but we won't know. I mean, by the way, I think they're doing the right things. Don't get me wrong. But we won't know if it's going to have any success at all for years. Even if you liked it, what's your rush? So what would you be looking for on a shorter-term basis, like quarterly numbers coming out in a few moments?

Yeah, yeah. I mean, look, people will be watching to see, obviously, just on the financials, the gross margins and capex and everything. They'll be watching the PC trajectory and whether or not they change their tune. And data center is going to be hugely important because, like I said, they did actually push out their roadmap. But in the near term, there's been quite a bit of flutters about some product delays. They've got a new server chip coming in called Sapphire Rapids, which seems to be getting incrementally delayed the longer we go. And so people are going to want some color on that. And so we'll see what they say and what that means like for the year.

But I'll be honest with you. Fundamentally, if you own the stock, you're not, like I said before, you're not owning it for this quarter or next quarter. You're owning it because you think, you know, over five years, they can turn it around. And whatever happens on this call today, it's not going to change any opinions on what's going to happen like the next five years.

Qualcomm's also a strong performer today on earnings. It's up 10 percent. The whole group, as I mentioned, is leading the market up 5.6 percent. What do you make of the Qualcomm numbers and overall what we're getting so far on earnings? Because this is still a group that's off about 25 and a half percent from its highs in a bear market. Yeah, yeah. Actually, so we started to see some cuts coming through from some companies blaming China and COVID and everything. By and large, I think those cuts have actually been well taken. Investors actually would almost like to see them. Like, we've been at the point of the cycle where numbers are going up and the stocks are going down because people worry that things are getting overinflated. So just broadly, we had TI, the Texas industry, that cut numbers the other day, but stock actually performed pretty well. In terms of Qualcomm, though, they didn't cut. They did the opposite. They

blew it out of the water. Everybody's been terrified of smartphones. Anything touching a smartphone has been death because there's been signs, especially in China, that they're weak. Qualcomm's powering through it. It's content increases. It's share gains. It's non-handset growth. They beat the quarter. They blew out in June. And then even sort of like soft guided September, the numbers look really, really good for Paul. That's why the stock's up today. Just numbers are going up. Stacey Raskin, thank you for joining us. Got a $40 price target, by the way, on Intel. Doesn't hate it. Just hasn't underperformed. Amazon's the other big

name on the earnings calendar after the bell. Deirdre Bosa here with a look at the key numbers to watch in that report. Amazon's coming back a lot today. Deirdre, what should we watch? Yeah, the company's got a lot of businesses. So key question going in, will a post-pandemic slowdown in that core e-commerce business be offset by higher margin, faster growing businesses like cloud and advertising? CapEx outlook is also going to be key here. Amazon has been investing huge in logistics over the last few years. So is this a so-called harvest year? Lastly, Sarah, do not sleep on Rivian. Last quarter, Amazon State contributed nearly $12 billion to its bottom line

shares, though. As you well know, they're down 70% this year. So that is likely to lead to a markdown. Back to you. What has been the swing factor with Amazon earnings lately and the stock? Has it been the cloud business or the retail e-com business? It's hard to say because they're such different businesses. E-commerce, we know that that's going to be slowing post-pandemic. Cloud has a high bar to clear because Microsoft and Google earlier this week reported very, very good results. It came in above expectations. It's a little bit harder for Amazon to achieve

that kind of 40% plus quarterly growth because it is the largest player, so a bigger base. But cloud is always really important. Increasingly, Sarah, analysts are looking and investors are looking at advertising. It's growing into a bigger and bigger piece. It's direct. So it's kind of shielded from some of the other forces. So that'll be key to you. And guidance, of course, as always. Got it. Deirdre, thank you. Deirdre Bosa. Mike, what do you make of Amazon? It's done about

23 percent from the highs, not the worst performing of the mega cap tech, but hasn't been doing that well either. No. And actually what distinguishes it is that before you had the broader Nasdaq peak, Amazon was also a bit of a laggard from, let's say, September of 2020. So it's been very much stuck. There was a real positive response on the print last quarter to Amazon, having really nothing to do with the Rivian numbers. It's just some relief. People thought they were going to be in harvest mode as opposed to investment mode. We've lost that gain and more. So I just, you know, you would expect that the expectations around it have been beaten down. I think some logistics costs is sticking in some folks' craws. They look at it. So we'll see. I think the response to the numbers in general for the big Nasdaq firms has been more benign than feared. So we'll see if that continues.

Well, let's see about Apple as well, which is also rallying right now into the close ahead of its quarterly earnings report, which is expected at 4.30 p.m. Eastern this afternoon. Wall Street expecting Apple to report $1.43 in earnings per share, about $94 billion in revenues for the second quarter. Mike, I know you say it's not always a bellwether,

but it does seem really important because A, it's huge, a big market cap, of course, but also a good read on how businesses are responding to the COVID lockdowns in China. iPhone demand, of course, always key about the consumer and then the services business, too. What will you be watching? It's absolutely important. There's no way to deny that. For the indexes, it's very widely held. It's a very widely embraced story. And in fact, it's outperformed by a lot. I mean, it's still kind of in its own uptrend. It's held its valuation. In fact, the valuation is the same as Coca-Cola. It's almost being viewed as that kind of steady performer, same exact P.E. and free cash flow yield as coke so the the estimates have also held up right so it's not as if people have downscaled their expectations that's probably okay again I think

it's about the response matters more than anything else to the to the news when I say it's not a bellwether it's mostly because it goes on these long Streaks of outperforming the market or sometimes just taking a break while the rest of the market goes higher. But clearly, it doesn't mean it's an unimportant stock. Of course, the buyback is a huge part of it. And the balance sheet in this environment, also a tremendous advantage. They're shrinking the share count aggressively. Warren Buffett's not selling any. That's a net positive for other shareholders. I'm looking at the Nasdaq right now, Mike. It's up about 3 percent. We are at the highs of the session. The Dow, though, not quite at the highs, up 583 points. It's really tech right now that is leading us higher. The semis, the softwares, the mega caps, basically everything. Internet retail is doing really well

right now. And the question you always have to ask on a day like today is, you know, some of the fiercest rallies happen in bear markets. Is that what this looks like? Well, I mean, it would be indistinguishable from a bear market rally or a bottom. I mean, this is kind of how it would look. I will say all we did in the S&P is nose above 4,300. You've kind of just gone back to where we were on Monday's close and also at the end of last week. But, you know, it could very well be the start of something. We have to see if we get further follow through, of course. As I said, in the January period, the same exact dates in January, just about, you did see finally some clearance to the upside once we got through the big earnings. That's right. That big relief rally. We've got two minutes to go here in the trading day. What

are you seeing right now in the internals? S&P up 2.4 percent. Looks pretty broad. It is pretty broad, Sarah. In fact, I would say that good breadth, but you're probably not going to get people to say that it's overwhelming. Again, people like to see 85, 90 percent upside volume. We're not quite there, but still good. 3.4 billion shares to the upside, less than a billion to the downside. Look at the five-day S&P 500, because this kind of tells you a little bit of what I was mentioning there for. Basically, just popped back up to where we were at the Monday close. So, you know, there's work to do here, but you could also say that that's carving out a low. We spent a lot of time near 4,200, didn't really decisively break it yet. The volatility index, as you would expect, coming in

pretty hard. We're now below 30. So you want to see that spike continue to slide lower. But again, it's wait and see. I think with the Fed in quiet period, earnings narrative takes over. And there are a lot of good ones. And that's evidence in the market today. As we head into the close, best performing stock in the S&P right now is Meta after earnings. It's up 17.5 percent. PTC on earnings. PayPal on earnings. Qualcomm. That's at the top of your list today. There's the S&P at 2.5 percent right now. Every sector is higher. Technology is the leader at 4%. Communication services finally having a good day here, up 3.25%. It's been a pretty brutal period. It's a group that's about 30% off its highs. Energy is working. Discretionary is working. Pretty much everything.

Financial is having a good day. The NASDAQ closing out with a gain of 3%. So really a strong comeback today. The S&P 500 with 2.5% brings it positive for the week. That's it for me on Closing Bell.