Closing Bell - Closing Bell: The Fate of the Bull Run 2/14/24

Episode Date: February 14, 2024

Ritholtz Wealth Management’s Josh Brown and T. Rowe Price’s Sebastien Page weigh in today’s market action following yesterday’s major sell-off. Plus, Jan Hatzius from Goldman Sachs gives his first reaction to CPI and breaks down what he is watching from the upcoming PPI report. And, Robinhood shares on the rise following last night’s earnings. CNBC caught up with the CEO for an inside look at the quarter.

All right, let's do it. Welcome to Closing Bell. I'm Scott Wadner, live from Post 9 here at the New York Stock Exchange. This make-or-break hour begins with some serious questions about the rally. Whether it suffered a serious blow yesterday, or was that sell-off a big overreaction? The debate full-on today. We'll ask our experts over this final stretch where they think stocks go from here. In the meantime, take a look at your scorecard with 60 minutes to go. In regulation, the major averages, well, they've been attempting a rebound all day long. Mostly muted success, though. We'll see what we do over this final stretch here if we can eke out a pretty decent finish.

There has been a nice bounce in some of the mega cap names like Meta, Nvidia. You see it there. They're all green. We're watching the Russell 2002 because yesterday, oh, what a beatdown. Small caps sliding near 5%. We're getting a little bit back today, better than 2% for the Russell. A big standout. How about Uber? Hit a fresh high today on some key announcements on the company's investor day. We're going to tell you about those a little bit later on. It does take us to our talk of the tape, the fate of the bull run for stocks. Let's ask Josh Brown. He's the co-founder and CEO of Ritholtz Wealth Management, a CNBC contributor, as you can clearly see here

at Post 9. I'm going to ask you about Uber in a little bit because it's your biggest holding. That's all I want to talk about. I'm sure it is. But we're going to talk about the market. Was it a big overreaction yesterday or not? I don't know. I think the reaction only makes sense when you look at it in the context of what has preceded it. We really are in rarefied air. If you look at the RSI's on some of the leading stocks that are at the vanguard of the rally, that really started, let's say, late October, early November. And if anything, has only accelerated here into February. When you look at stocks like Supermicro Computer, which I know is an amazing company,

but also sounds like something Christopher Moltisanti would have been pitching on The Sopranos. You look at a stock go from 200 to 800 because it's AI, as if it wasn't AI, you know, 600 points ago. That kind of action, and you start seeing 87 RSIs, 91 RSIs. You never see that in a middle phase of a market. When you mention RSI, just to make sure everybody's on the same page. Relative Strength Index.

It's an indication of whether things are overbought in some respects. And that's what you're talking about. So RSI calculation very simply is measuring the strength of a stock. And it's doing so in a mathematical way so we don't have people licking their finger and looking for the wind. It's a way of calculating, okay, the stock's gone up a lot, but relative to the market, relative to itself, how egregious has the move been? A 70 RSI is what the pros would tell you. All right, things maybe need to cool off a little bit.

You could remain overbought for a long time, though. It's not a great buy-sell indicator on the day you hit 70. When you hit 90, there are no sellers, or every short seller has automatically been converted into somebody who's covering. Then what? Who comes in and buys a stock at a 91 RSI? That's what we're talking about. There are a lot of those stocks in the market, and I own some of them. No question. Look, there are those who would say, look, to your point, we were ripe. We were ripe for a consolidation, a pullback of some kind because of the very thing that you cite, whether it's the name you bring up or many of the others. The question comes down to whether the goalposts moved yesterday in a meaningful way on what the

market expectations were in terms of why we got here in the first place. Economy remains good. And yet the Fed is still going to cut this year at some point and they're going to cut several times. It's a case story. It's a tenth of a percent, quote unquote, overheated on one monthly reading of core CPI. Like from my perspective, I'm sure that generate a lot of algorithmic stuff. These are rules-based trades that are being done dispassionately by a computer. Those run their course.

You find 10 algorithms doing one trade. There's another 10 on the other side doing the opposite trade. It washes out. I don't think that's what's important. I think the real show now is how realistic our expectations are for the AI related earnings growth that this market needs to justify what we're seeing. And when I

say market, I want to be clear. The next comments I'm going to make are specific to the NASDAQ 100. It's not that these companies aren't important to the Dow and the S&P, they are. But what happens with their share price has a much stronger reverberation in the NAS 100. I think the NAS 100 is out of control. I think some of the moves that we're seeing in NASDAQ 100-like stocks, Supermicro being an example, Arista being an example. Look, I own CrowdStrike. It just tripled. I don't know what to do with it. I don't want to sell it. I love the CEO. I love the company.

I love the opportunity. But that's the reality. This is the kind of environment that we're in. So I'm worried about the NASDAQ primarily. I'm not worried there's a crash. I'm worried that next week, a week from today, February 21st after the close, we're going to get this Q4 from NVIDIA. I'm starting to think, like, what could they possibly say that's going to keep all the balls in the air? I'm running out of, and I'm along. I'm not like one of these bears that watched the whole thing go up and tried to call the top every week.

You've been in it longer than most, and you recently trimmed 20% of it because of the concerns that you have. Yeah, so it's not concerns about the fundamentals of NVIDIA. It's not concerns because I'm not excited about AI. I'm as excited as everybody here. It's at a certain point, we have discounted all of the potential and then some. And we're setting companies up to fail, not because they're not great, but because nobody could possibly match the enthusiasm. And I was around when we did this 25 years ago. We had the broadband build out that could never live up. We had the competitive local exchange carriers.

We had JDS Uniphase and the optical networking plays. We had thousands of stocks with these types of expectations. I don't think it's as egregious now. I'm just telling you the flavor is very similar. It sort of tastes the same. You listen to people talk. You watch the way they comport themselves. You watch how they're expressing desire about the stocks that they're looking at. It's really, really similar. Doesn't mean sell. Doesn't mean short. It just means if you have 18 of these things in the portfolio, maybe today you're not

hunting down the 19th. You know, I guess one of the key differences between then and now is then you had hundreds of companies that were going up theoretically or dozens based on eyeballs and expectations, no real earnings or the ability to monetize the eyeballs at that particular time. Yeah. At least now. You get no revenues. At least now you do have monetization in terms of NVIDIA. It's just the stock has escalated so much. It's skewed the way that people need to look at this now. Let me share this with you.

This is just, this is just, I'm not going to compare NVIDIA against ExxonMobil. Okay. This is NVIDIA against Alphabet. Like, let's be somewhat fair. One year ago today, Google had a market cap of $1.2 trillion, and Nvidia had a market cap of $566 billion. A lot of people back then thought Nvidia was overvalued. LOL. I hope you didn't stay tuned for what happened next. Last quarter, Nvidia did $18 billion in revenue, while Google did $77 billion. Google, I'm saying Google,

it's Alphabet, just reported their last quarterly revenue at $86 billion. NVIDIA reports next week, the street thinks $20. So without a doubt, there has been an expansion of growth in NVIDIA that justifies the move. And in fact, the stock actually has gotten cheaper as it's gone up because the expectations keep going higher. My concern is not, is it like an outrageously priced stock? It's become so important to the market in mindshare. Even if you take the fact that it's 5% of the S&P or 4.5% of the S&P off the table, that's a big deal. But just put that aside. It's so important from a sentiment standpoint. So this is my concern. And I'm going into it still long stock. They could have an incredible quarter, have amazing commentary. And I'll talk about some of the things that I'm looking

for. And you get a single digit pop on the stock in the after hours. And all of a sudden, the next day, the air comes out of like 500 other stocks because people look at that and say well is this is this it is this as good as it gets um seasonally that actually is the kind of thing that has happened in this late february march period before and then don't forget a lot of people have taxes to pay come april and you see some uh tax-related selling then so i'm just trying to be circumspect and not lose my head. I'm having as much fun as everyone else. But, like, I just think we all need the context that NVIDIA could have a bright future and have a share price that's due for a correction.

Which is why you, you know, look, I said you took 20% off of the holding. By the way, already wrong. Which is astounding. It's on 30 points. It is astounding how the stock continues to go up. And even for much of the day yesterday, in the bludgeoning that we were taking in the market, NVIDIA for most of the day actually remained green. It shows you people don't want to be either short or out ahead of the print because they're afraid they're going to drop another amazing print and the stock's going to drop another amazing print

and the stock's going to go up another 30 points. I feel like for a certain type of manager, a growth manager who's already under the microscope for charging 1% and underperforming the NASDAQ for five years, there's nothing scarier than having NVIDIA report another blowout quarter and being way underweight or not in the name. Like that's almost worse than writing it down 10% for a certain type of person in a certain place in their career. Really quickly, some of the things that are going to matter here, the overall size of the AI accelerator market. And this becomes really relevant because what AMD did on its report was absolutely stunning. They lifted their 2027 industry-wide TAM, total addressable market, to $400 billion.

You know what it was before? $150 billion. So this is the magnitude of expectations that I'm talking about. AMD is up almost 4% right now. Yeah, why not? And there's no slouch. It's up 20% year-to-date. Okay, so this is a big one. Like, how big is NVIDIA now thinking about this market, given the rate at which AMD is raising the bar?

Two, CapEx in the data center. Like, that's the number. There's a lot of other numbers that are going to be important. That is the number. And then there's some other interesting things, like will pricing hold up even if volumes hold up? And that's going to be a supply demand. There's now a question about are global sovereigns in the marketplace directly placing orders going around other tech giants like our countries, building supercomputers and placing orders?

And are some of those orders duplicate orders? Is there maybe not as much real demand as there seems like? And this happens in all types of markets, not just tech. And then the last thing, they've made some noises about building a custom chip design unit within NVIDIA to go to companies and say, more than just the GPU, we'll actually build your GPU for your own specific use case. That sounds really exciting and super profitable. Is there anything there worth baking into the estimates or are we just like we doing like late night dorm room stuff? So those are like the four big themes that I will

be paying attention for. All right, let's bring in Sebastian Page now of T. Rowe Price into the conversation. Sebastian, it's good to have you back. The way Josh paints this, and you don't have to necessarily speak about the individual name of NVIDIA, but it sure sounds like he thinks that this is right now arguably the key to the market, that they better deliver next week or you could have an air pocket within the NASDAQ 100

that's going to make people real uncomfortable. Scott, I think it's maybe the second key to the market, the first being still inflation. I'm not as relaxed as Josh on inflation risk, and I can explain why. But on the question of the Magnificent Seven, you know, up 70 percent, I think Josh makes good points. It's not necessarily overpriced. It's not, to your earlier question, Scott, tech bubble territory. Up until recently, we were actually, as asset allocators, neutral between growth and value. And we've just added a little bit to value recently. So markets are paying attention to earnings. They're paying attention to these stocks. But what you've seen

over the last few days is I'm not as relaxed as Josh on the inflation risk here. I understand. But how can you hold both views? Because to me, this seems conflicting that you say inflation risk is to the upside, but yet you're increasing your overweight value for the first time in a long time, because theoretically, if if it does work out that way, if inflation does remain stickier than we think, rates remain more elevated, the Russell's going to get hammered. Yeah. So if you refer to small caps and they've been trading that way, right, they've been trading with rates pretty tightly over the last few days. But going back to value, though, value tends to do well when you have upside surprises in inflation.

Look, the break-even inflation, which is kind of what the market is pricing in, it was at 1.9% at the beginning of the year. It's at 3.4% today. The Atlanta Fed wage tracker is at 5%. There's upside risk on oil given all the geopolitics, and I think the war is heating up, not cooling off. Financial conditions, Scott, if you look at the Bloomberg Index of financial conditions, they're actually back as loose as they were, this is remarkable, as they were in early 22 when rates were at zero. So, you know, I'm not saying we're going back to 9 percent inflation. But what I'm saying is that is kind of the risk for markets,

at least in the short run. But I mean, it will react negatively in the short run. Can I take the other side? Yes. Actually, go ahead. By the way, I appreciate that you think I'm giving relaxed. That wasn't what I was going for. And I'm very rarely accused of being relaxed, so thank you. What do you say to the constant, almost staccato drumbeat of corporate layoffs hitting the wire at this point on a daily basis? Companies beat earnings. They announce layoffs. They miss earnings. They announce even more layoffs. They don't even report earnings. They announce layoffs. They miss earnings. They announce even more layoffs. They don't even report earnings. They announce layoffs. What do you say to $2

trillion worth of corporate debt repricing and higher rates? What do you say to maybe a trillion in commercial real estate that's going to be in some version of the workout process in the next 12 months? Are those factors not disinflation enough um to maybe have us not worry so much about a one month burst in health care costs for example so you're right about the one month it's also you're seeing the trend on three months now and it's not it's not the right thing to do to annualize one month but let's just look at january 0.3 That's sort of over 3.5 percent. That's what we're seeing now. Look at house prices, Josh. They're up nine out of the last 10 months on the Shiller house price index. And they're up at about a clip of 8 percent. I'm not saying we're going back.

I'm not saying we're going back to 9 percent. But shipping costs have just doubled in many parts of the world, given what's going on in the Middle East in a few weeks. So I think this is what the market's coming to realize. And going back to portfolio positioning, value can do better in that kind of environment. What value? What are you speaking of specifically? What is value to you right here that works well? So historically, you can look at the sensitivity of value to inflation shocks. It does quite well. And it's driven by energy stocks and commodities and materials. And, you know, when you look at those stocks, they're attractively valued right now. We also have a long position directly into a real asset strategy if i look at our research platform so

i'm an asset allocator but i always look at what our stock pickers are doing they're long energy right now and so that's a signal as well uh for me they've been wrong they've been wrong yeah that yeah that's a forward-looking view yes i know but many held that forward-looking view since the beginning of last year and they were wrong And materials haven't done anything either. I'm struggling to figure out why those are suddenly going to start working now when inflation is still trending lower. I think it is trending lower as the base case. I think that the risk is to the upside on inflation, given break-evens, given wages, given shipping costs, given real estate prices, given the risk to oil.

Does that mean we're simply pushing off the first cut of the cycle? Or does that mean we get back into a moment where we're contemplating further hikes? When you say that's the risk, I do agree with you, it is a risk. In what way would that risk be expressed? So, look, we just went from about six cuts priced in to maybe four cuts priced in. The Fed has been telling us three. I think we kind of unwind that. And you see the market jitters right when you see some inflation prints and data. And we have a few more coming over the next few days. So, Josh,

I don't think this translates into the Fed, you know, pivoting back to hikes. That is a small probability to me. But it's all about where market expectations are and where they're resetting. In my view, this can create volatility. This can create a sell off in stocks and actually might be a buying opportunity for stocks. Because, look, in the long run, inflation actually helps earnings, right, because of nominal growth and the link between corporate earnings and nominal growth. But, I mean, I'm looking at, you know, things like Austin Goolsbee today, inflation goal based on the PCE.

You seem to be suggesting all the metrics of CPI. Rosengren, former Boston president, quote, market overreacted to the CPI report. Nothing in the report indicates anything other than a continued trend towards lower inflation. March was already off the table. Little impact on May. It sounds like you would disagree with that assessment, which is, you know, fact based. Yeah, I would disagree in the sense that even core surprise to the upside as well. It's the, you know, the demand for services right now. People are spending. There's a big blob of money

still out there in the economy. Think of six trillion money market funds, four trillion in checking deposits. And this strong demand for services might begin to offset the goods disinflation that we're seeing, which is also jeopardized by increased shipping costs and so on. So again, I'm not pounding the table saying we're going back to six, seven sort of pandemic situation. I'm saying just look at where the break-evens have moved. And if you're going to take a position in terms of is the risk for inflation on the upside or on the downside, I think it's on the upside. You guys disagree in terms of your credit positioning, too. Why don't you tell me, Josh, what you guys just did in a fairly large way across your firm for the portfolios?

So I'm not. Yeah, so I'm not sure. Sebastian and I might disagree. One of the things we did during the pandemic, and we talked about it a lot, was all things being equal, if you're not getting paid for duration, why take it? We had substantially cut down duration across all of our client portfolios, and it obviously turned out to have been the right move. The best inflation hedge this time around was cash, even better than tips. So that's something that we reversed over the trades took place last week. We put a letter out to clients today, which is why I'm allowed to talk

about it. But the idea is, OK, now you're not quite getting paid one for one on the duration that you're taking, but you almost are. And it's for the first time in a long time. And this is not necessarily a market call on where the next 50 basis points in the 10 year are going. But if you can lock in today's rates for a little bit longer of a period of time, why would you take the risk that maybe you're holding out for a little bit more if you just wait a month or three months or five months? So we're actually not waiting for that 2 percent moment on CPI. We're making the bet that this is the right risk reward tradeoff today is to go ahead and lengthen that duration, which really just means looking at Treasury portfolios, looking at tax-free municipal bond portfolios, and trying to lengthen where it makes sense

on a case-by-case basis. I set it up the way I did because you have the opposite view, don't you, Sebastian, in terms of the duration you want to take? So we're still short duration. So in that sense, it's the opposite view. We're not short duration by a lot. We were significantly short in our tactical asset allocation positioning throughout 2022 on duration. And right now we're doing it in a barbell way. So we have the cash and then we do have some credit. Despite the tight spreads, the total yields on credit are interesting

for an asset allocator. If you look at risk return relative to stocks, for example. But if I'm talking about upside to inflation risk and upside to rates, it's consistent that we'd still be slightly short duration, just not as much as we were in 22. Yeah, Sebastian, I appreciate it. I stepped on your toes a little bit. I apologize that I look forward to having you back soon. That's Sebastian Page, T-Row, joining us. Josh, always appreciate it. He was great. As well. We're going to look forward to next week, which is going to be a huge event with NVIDIA, and we'll see you then, too. All right. Let's send it over to Christina Partsenevelos now for a look at the biggest names moving into the close.

Christina. Well, and I'll be covering NVIDIA, too, but let's talk about shares of cloud platform provider Akamai Technology. Down after quarterly revenues and full year revenue guidance, missed expectations reflecting weaker customer demand. Companies may be spending a lot on AI, as we know, but overall IT spending remains cautious, with many firms spending less on cybersecurity products, I should say, and Akamai's guidance demonstrates this trend. Shares down 8%. Shares of MGM Resorts are down, despite the company's better-than-expected earnings results today.

Although the company's China and Macau segments impressed, the U.S. regional casino segment suffered from effects of a strike in Detroit and as well higher labor costs. And a reminder, any windfall from the Vegas-based Super Bowl won't show up until next quarter. Shares down 6%. Scott? All right, Christine, appreciate it.

We'll see you in a little bit. We're just getting started. Stocks moving higher here following yesterday's big drawdown. Up next, Goldman Sachs' Jan Hatzius. We get his first reaction to that hotter than expected CPI report. What he's looking for now from the PPI report later this week. Whether he thinks yesterday was a game changer for Fed rate cuts. He'll tell you first next. All right.

Welcome back. Stocks trying to claw back some of yesterday's steep losses as that hotter than expected. CPI now raises the stakes for upcoming inflation data and calls the markets fed rate cut expectations further into question. Joining me now, Goldman Sachs' chief economist, Jan Hatsias, here at Post9. Welcome. It's great to have you. It's good to be here. So we build this as your first reaction here from the CPI. What is it?

It was a higher number, but not unexpected. We have been looking for a higher number because of what we've called a January effect, big price increases at the start of the year that aren't fully adjusted for by the seasonal factors. And that's largely what we got. In addition, we also had a bigger increase in owner's equivalent rent, which is, as you know, a huge part of the CPI. It's 30% of the core. And it is a series with quite a lot of measurement difficulties,

which we think is probably an outlier to the high side. So you moved from March to May, which I think everybody knows at this point in terms of when we get the first rate cut. So yesterday doesn't do anything to change that for you. We have not made any changes. We still think that we get a cut in May. There is some risk to it. Clearly, the Fed has been pushing back.

Chair Powell pushed back very clearly against expectations for March at the last press conference. And on balance, I would say the Fed speak has generally talked about, you know, it's not quite time yet. It's been mixed. We heard from Chicago Fed President Gouldsby today, who took a more dovish line. But that has been the push. For us, the key is really what happens to inflation.

And we still think core PCE inflation, which is what they're most focused on, is on its way back to very close to 2% soon. So why should they even cut on that time frame that you have if the economy is so good? Well, because I think with a 2% core inflation rate or something close to 2%, as Chair Powell said, there's just no reason to have a five handle on the federal funds rate. And they've clearly stated that they will want to move away from that. They haven't tied themselves to any particular timeframe, but I do think that that's a pretty strong message that they don't think a five and three eighths federal funds rate is appropriate when inflation is basically back to normal. Assuming that it continues to move back to normal, what if it remains a little sticky and the economy remains too hot? Do you have any fear around that risk?

Well, that's a possibility, of course. There's always uncertainty around the forecast. And if the data come in hotter than expected, then that's a reason to hold off for longer. No question about that. But there was nothing in yesterday's print that I saw that would fundamentally call that into question. Were you surprised the way the market reacted yesterday? I mean, Rosengren today says it was a big overreaction. There's nothing to lead him to believe that inflation isn't working down towards 2 percent. It's obviously sort of the view you have. But what about the market reaction to it? Well, relative to the fundamental information, it was a really big move.

Of course, we had seen, you know, a pretty big move in the other direction. So that's, of course, often what you end up getting. But I would totally agree with President Rosengren that the fundamental information just shouldn't have been that shocking. Lastly, you know, so it raises the stakes for PPI and then it would seemingly raise the stakes for PCE. I think it's on the 29th of this month. How should we view that? Well, again, I think there is a January effect. We saw it in the CPI. I think we'll see it in the PPI as well and in the PCE index in particular. Actually, the PCE index is where we're expecting another fairly sizable print, somewhere 0.3, 0.4. It's going to depend on the import price numbers and on the PPI. So we'll see. But I think it's also going to be a bigger sequential print. But at the same time, I think the year-on-year

rate is going to continue to come down because last year, core PCE was 51 basis points. I don't think this year's core PCE number is going to be close to 51 basis points, which means the year-on-year rate is going to come down, and that's going to be important. All right, good context. Jan, I appreciate it very much. Thank you for being here. That's Goldman's Jan Hatzius right here at Post 9. Up next, hindsight is 20-20.

Evercore ISI's Roger Altman is back with us. He'll tell us why he thinks maybe a soft landing isn't here after all. That's after the break. Closing bell's coming right back. We're back. Best stock in the S&P today right there. It is Uber, up better than 13%. That after the company announced plans for a big buyback, $7 billion. Josh Brown back with us because it is, as I said earlier, his largest holding.

You want to react to this? I mean, I know you're super bullish on it. Only in private. This is, you know, yet another big game. Yeah, no, I'm freaking out. Listen, this is my highest conviction stock. I've said it on the air a thousand times. It's my biggest position. It's been for more than a year now.

And the stock has had an incredible year. Today is just more on top of what's really been an extraordinary transition. This was a name that two years ago I had people throw tomatoes at me. The consensus was they'll never earn money. How could food delivery ever be profitable? The rides business will never be profitable. Oh, by the way, their whole workforce is revolting because it's not actually a workforce. And they're in court and they're being kicked out of countries. Now it is acknowledged the largest global mobility

platform. It is to mobility, meaning moving objects and or people from A to B. It is to that what Google became to search, what Facebook now meta became to social media, what Amazon became to e-commerce and the cloud. That's what Uber is in its category. Now, it hasn't scaled yet, which is why I think they're still upside. It's $160 billion market cap. And that's really the opportunity. It's harder to scale Uber because of all the people involved, the vast amount of friction when you're trying to move goods or move humans. That's why this is not yet in the trillions of dollars. It just takes time. But I think it can get to that level at some point in my lifetime.

So I'm remaining long here. I'm not treating this like it's a short-term opportunity. You are not the only investor optimist. Brad Gerstner of Altimeter, who we've spoken to on numerous occasions, told me earlier, quote, and he's obviously long in the stock, Dara and Team Uber are firing on all cylinders along with Zuck, Mark Zuckerberg. Dara put a dagger in the age of excess. The results? Massive growth in profits, nearly tripling free cash flow to $9 billion in 2026, along with a return of capital to shareholders and improving stock-based comp. That's the SBC. Uber is showing a blueprint for

all of tech. So how many companies can you think of that are not in the MAG-7 have the level of dominance over their area and have a potential TAM that theoretically could have a T in front of it. There's not a lot left. This is the number one or two company in every market they're in. And if they're number three, they leave. They divest the business. They walked away from China, for example. People probably told them, don't do that. They did that. Uber, Uber, Dara actually specifically got the memo of efficiency like three years before Meta did. They were cutting costs in 2020 and 2021 because of how poorly the IPO had been received in 2019. So this company already had that religion. They just had to get to scale. That's where we are now. They've they've really climbed the most difficult mountains. They're

number one. They've beaten Lyft, I wouldn't say into submission, but into solidly number two. I don't think they really look at it as a competitor. They like that Lyft exists, so nobody can call them a monopolist. But the reality is that's Danny DeVito. This is Arnold Schwarzenegger. I love Danny DeVito, but nobody wants to invest in Danny DeVito's ventures. You want to invest in Arnold. That's what we're doing here. So I'm staying long. I still think there's room. I'm looking for 100 bucks by the end of the year if the market doesn't fall apart. All right. We got to bounce. I really appreciate you sticking around.

Thank you for your take. That's Josh Brown once again. All right. We are green across the board, gaining some momentum here as we head towards the finish. Investors grappling with a big question after yesterday's hot CPI print. Is the soft landing scenario in jeopardy? Let's ask Evercore's Roger Altman, the former deputy U.S. Treasury secretary. It's good to have you on. Welcome back. Hey, Scott. How are you? How would you answer that question?

Are we suddenly need to rethink this whole thing? Well, first of all, I'm not going to try to imitate Arnold in my answer. But no, I don't think we need to rethink it. But I think, as so often happens with markets, the narrative got ahead of itself. And by that, I mean, there was a degree of price to perfection, which, as is usually the case, was overdone. And if you think about it, the narrative had developed completely unlike six to nine months ago when it was the opposite, that growth is strong, labor markets are solid, inflation has sufficiently cooled, markets are at an all-time high, and the job is done. And that level of perfection almost never happens in the real world. And so I don't think yesterday's inflation uptick or a higher-than-ex expected number derails that bold scenario. I just think it puts a degree

of reality into it. And why would the Fed take any risk of a premature easing? Well, they wouldn't. And as Paul said on 60 Minutes a couple of months ago, or a couple of weeks ago, the data has to be good before the Fed to make that profound move toward ease. So, no, I don't think the good scenario is derailed. It was just never going to be as perfect as the narrative had developed to be. Was yesterday just a clear-cut sign of how reliant, so to speak, the market actually is on rate cuts? Or is that in and of itself an overreaction? Because some would make the argument that we don't need rate cuts at all. And because the economy is so good, that is more important than when the Fed first cuts. Well, let me step back a minute. I think a really fascinating aspect of this era we're in is the degree to which the conventional wisdom

turns out to be wrong. And this example of too much perfection in the expectation is one example. But if you think of even bigger ones, six to nine months ago, at least half the world in finance and economics thought we were going to have a recession. And at minimum, 2024 would be a very weak year on growth. Now we're seeing not only do we have an amazing fourth quarter, but the current Atlanta Fed growth tracker, I think, is two and a half to three for the current quarter. Completely different than what was thought just a few months ago. Think about China. Three years ago, unstoppable colossus.

Today, demographic collapse, poor outlook, and so forth. Both of those were exaggerated. It was never an unstoppable colossus, and it's not now a situation whose good days are completely behind them or over. And we just see example after example of that. By the way, I'm not blaming anybody, but U.S. intelligence. Russia will take Kiev in four days. Not really. So we just live in an era where the world seems to want nice and easy and very clear narratives, when in reality, it's not really that way. Yeah, you make good points.

Great context and insight. Roger, thank you. We'll see you soon. Roger Altman from Evercore joining us once again on Closing Bell. Coming up, investors anxiously awaiting the parade of 13F filings due by the end of the day. One key fund manager already revealing its biggest stakes. We have the details next. All right, we're 14 from the close. Tiger Global's latest 13F hitting the tape a little bit earlier, and more are on the way. Leslie Pickard, of course, following that money for us. Hey, Les. Hey, Scott.

Yeah, some interesting insights here. Tiger Global reducing exposure to Chinese names during the fourth quarter. As you know, these 13F filings are backdated to the end of the quarter. In this case, that would be the end of December. Tiger during the quarter selling out of Alibaba, that stake was worth 128 million at your end. It also pared back JD.com by 11%, holding a quarter of a billion dollars at that timeframe and sold out of a small stake in Kanzun. Also, Tiger Global reducing exposure to some big tech names like Alphabet, Meta, and Microsoft, as well as NVIDIA, could be a little bit of profit taking there. But Tiger increased its stake in Amazon by 24% and upped its stake

in Taiwan Semi by 48%. So pretty sizable boost there. Also worth noting, a sizable slash in Uber and Workday. Uber by 41%, Workday by 30% respectively. This afternoon, as you know, marks the deadline for funds to report their fourth quarter trades. We'll be on the lookout for more filings as they trickle in. Usually we get this onslaught after the close. So about 13 minutes to go, Scott. Interesting moves. I mean, the sizes of some of these positions, just given the crazy moves that we've seen in these stocks, just gets too big for for some to handle. Has nothing necessarily to do with anything else but that. Yeah. And I mean, this is a fund that was reportedly up 29 percent last year.

They had a pretty rough 2022, if you recall. But last year they were on the rebound. So, you know, it's tough to look at some of these moves and say that it was anything more than profit taking. I mean, obviously, there's an opportunity cost to every trade that you make, especially when it comes to big tech these days, but still a very good year for Tiger Global. So it's kind of interesting to get a sense of kind of their thinking behind the portfolio and where within big tech they want to be putting more money to work and where they're kind of maybe crystallizing some of the gains they saw last year. Appreciate you going through those trades. You're going to be busy as they all funnel through. Leslie Picker, thanks so much. Still ahead, Robinhood's on the rise today, jumping after last night's strong results. Stocks up almost 13 percent. What the CEO told CNBC about the quarter and the company's future. That's just ahead. Closing bell. We'll be right back. Now in the closing bell market zone, CNBC senior markets commentator Mike Santoli

is here to break down the crucial moments of the trading day. Plus, Kate Rooney on Robinhood's post-earnings rally. Christina Partsenevelos looking ahead to Cisco's report in overtime. Kate Rooney, tell us first about Robinhood. Scott, it was a surprise profit for Robinhood. They're getting a lot more aggressive, though, on courting some of the experienced, wealthier clients from traditional brokers out there like Schwab and Fidelity. They made a little bit of progress on that in the fourth quarter, $4.6 billion in net deposits.

$3 billion of that came from transfers from other firms. January so far has already topped that Q4 total. Average transfer balances, this is key, topped $100,000. They now have more than $100 billion in customer assets. Still, it's nowhere near the trillions over at Schwab or Fidelity. Talked to CEO Vlad Tenev earlier. He compared it to the race to zero commissions

that Robinhood sparked in the industry. He does expect competitors to respond eventually. There's a reason why every brokerage app that's relevant starts looking more and more

like Robinhood, right? So I think it's certainly in the incentives are for them to kind of ignore us taking assets. But I think if we keep plugging away and continue to take share, they'll have to respond. Stocks up 13% or so today after strong earnings. Cost cutting is also a big discussion around that company. Scott, back over to you. I appreciate that, Kay Rooney. Thank you very much to Christina Partsenevelis now on what we should expect from Cisco in overtime. Well,

despite large CapEx promises from cloud giants, the networking market continues to remain under pressure as customer inventories are getting worked down. Recall that Cisco, which makes a lot of the enterprise networking products, did lower their guidance last quarter. So expectations have been lower going into the print. You can see shares are down about 1% year to date

versus competitor Arista Networks, which is up 12% year to date. Last quarter did see a normalization in Cisco's backlog, which did help sales. But investors fear that backlog support won't be there this upcoming cycle. Bank of America believes growth will go through a steep correction in fiscal 2024 and model product revenue to decline 9 percent, 13 percent and 12 percent year over year in the

next three quarters, a.k.a. all lower. I confirm that Cisco is also expected to reduce its head count. Reuters is being specific by saying the thousands. So we'll definitely get details on that. But this follows a similar headcount reduction back in 2023. And these cuts could be a way to preserve margins amid a top line, maybe a top line miss, a signal of a continued weak macro market. There's a lot of caution around this name. All right. Yep. Christina, thank you. CNOT. Christina Parts and Nevelos. Mike Santoli here. Less than two minutes to go. This is a pretty solid move today. I have to say, I mean, we're pushing back towards 5000 on the S&P. The Russell's up almost two and a half percent.

I'd say that's a that's a win given what happened yesterday. Yeah, it's pretty respectable. It shows there wasn't really a big reassessment of the macro picture. Yes. Yesterday's bond market move had to get the attention of the market. And when you have one of those, like the first big, broad down day in a long time, which is what we had yesterday, what I'm mostly focused on is, did it throw the mechanics of the market off? Did it reveal any stress in the positioning? Are there trapped people anywhere? And therefore, does it feed on itself? That clearly didn't happen. You had the VIX overshoot to the upside. I was saying it at the close yesterday,

almost to 18 on a 1.5% move in the S&P. That seemed outsized. Now you've bled some of that away. Now, I do want to see how the market handles the former highs and the levels that we kind of bumped up against, 18,000 on the NDX and all the rest of it, before you say this episode is over.

We still have weak seasonals in the back half of February. And certainly one day didn't take care of a lot of over-optimistic positioning, even if it just skimmed away a little bit of the froth. Still got some crazy stuff happening in the AI names. Yeah, no doubt. But, you know, you had dip buyers come into treasuries and to stocks. For now, yeah.

And we'll see if it persists. And I think the bigger thing is it didn't really cause you to rethink the fundamentals here of a resilient economy and inflation moving in the right direction. Appreciate that very much. Mike Santelli, we're going to go green. And the S&P may just get 5,000 again at the close. Trying to settle right there into overtime with Morgan & Don.