Closing Bell - Closing Bell: The Market’s Resilience 4/23/26

Episode Date: April 23, 2026

Tensions with Iran continuing to flare and earnings season is starting to kick into high gear. So, what’s at stake for the market’s record run? We discuss with Wealth at Neuberger’s Shannon Saccocia, iCapital Sonali Basak and BNY Wealth’s Alicia Levine. Plus, Wedbush’s Matt Bryson tells us what he is expecting from Intel’s results in Overtime. And, Ed Yardeni from Yardeni Research tells us the one beaten-down sector he sees as a buying opportunity. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And welcome to closing bell. I'm Leslie Picker in for Scott Wapner today. This maker break hour starts with another run for records. The S&P and NASDAQ pulling back after hitting fresh all-time highs earlier in this session. Here's your scorecard with 60 minutes to go in the trading day. You can see the Dow off-session lows, but still down about half a percent. NASDAQ, same thing, down more than 1 percent, and the S&P down by about 0.6 percent. Utilities, staples, industrials. Those are the sectors leading the wage day, while tech financials and discretion. are today's laggards. Among the top movers service now plunging following earnings report, currently down 17.6 percent, while the semis continue to rally with names like Texas instruments and on semi, both pushing higher. And we are watching shares of Intel as that company gears up

for earnings after the bell. We'll break it down with what to watch coming up. But we begin with our talk of the tape. The market's resilience as tensions with Iran continue to flare and earning season kicks into high gear. Joining me now to discuss we've got an all-star panel. CNBC contributor Wealth at Newberger CIO, Shannon Zoccia, I capitals, Chenali Basic, and BNY Wealth's Alicia Levine. Thank you, ladies, so much for being here. So Shannon, let's start with you because we have seen a renewed risk-off tone today, especially as Iran headlines. Basically, there are just continued concerns about a prolonged closure of the Strait of Hormuz. Iran's, Iran's as mayor news agency reporting, air defense systems were activated in parts of Tehran to counter hostile targets.

But still, I mean, the markets are somewhat looking through this, it appears. How much do you think that will continue? And are you worried about flared tensions escalating and creating renewed volatility in a bigger way? It's a great question. I mean, we've always been concerned about the duration of the conflict. Anytime that you start to see elevated energy prices, you know, four, five, six, you know, out to eight, 12 weeks, you're going to see that transmission effect in terms of global growth. And I think what we've seen in the bond market is that there have been

inflationary concerns, the equity market, the credit markets appear to have shrugged off those growth concerns. And we've seen this really nice rally over the last couple of weeks. But I wouldn't, investors shouldn't be concerned about the daily ebbs and flows in terms of what sectors leading, what sectors are lagging, because we're in the midst of earning season. And unlike earnings season last quarter for fourth quarter earnings, we are seeing companies rewarded when they come out and post solid results. And that acceleration of earnings growth is really what is the fundamental foundation for our view and for our ability to continue to look beyond this conflict and get comfortable in that risk-on stance. And Chennelly, so far in the conflict, it's been

mostly related to energy and whether energy will have some sort of transmission effect to consumer spending and whether that has an effect on the fundamentals of individual businesses. But with Service Now, what I found really interesting was that they said that, you know, because of the conflict in the Middle East, they were had to push out some of the contract signings that they had. And I'm just curious, now that we're really in the throes of earnings season, how much you think really direct impacts like that will play a role? It's a good question.

In the almost eighth week of this, right? And the longer this goes on, you could see consumption, whole. up, generally speaking, because when you look at the higher income versus lower income spend on gasoline, it's a big difference, right, in terms of how much of the wallet share. But once you start seeing businesses start to pull back or hold off on decision-making, which is something you can see and something we are continuing to watch for signs of in this cycle, then you have a little bigger of an issue. Now, when you look at street estimates at CAPEX spending is expected to go down as well.

A lot of this was propping up PCE and aggregate. And so when we think about the growth story as we head into the tail end of the year, I'm with Shannon. We love the earnings story. We love it. And we actually think that earnings can continue to grow from here. But we are a little concerned at the margins when you think about businesses not maybe pulling back, but staying on hold for a little while longer.

And Alicia, one thing that the producers had in the notes that really stood out to me is that you say that markets always bottom before the worst headlines. Why do you think that is? And would you say that we're kind of past that point? So it's really interesting because the equity market is very efficient in getting to the terminal value of the worst case scenario. And we saw it with tariffs last year. We saw it during COVID. And then we even saw it in 2022 when there was a concern about a recession because the Fed was hiking rates so much. But the headlines can still continue to be messy. So in the pricing, the market has more or less moved on from the geopolitical conflict and the war. You're going to have messy days. You're going to have messy headlines.

And to the extent it's almost fully priced out, you would expect to see volatility. But ultimately, we think the bottom is in as it relates to geopolitics, because it's kind of clear that the administration is going to pull back and make a deal. And whether the deal is this week or three days ago or three weeks from now, that's really what's being priced in. So I would use volatility if you're interested in being in the market, because we do see, you know, huge earnings growth. Earnings expectations are actually 5% higher now than they were January 1st. Margins are expected to be 15% on operating margins.

Again, we have to hear from companies. Is this realistic of input costs are going higher? But that setup is very hard to ignore. And so ugly headlines can continue. The markets moved on. But that note about psychologically front-loading the worst-case scenario and pricing that in right away. And then, oh, as time goes on, maybe. reacting less does seem to be a pattern that we've seen, at least over the last five or six years or so,

this time of year. Shannon, you like large-cap equity as you upgraded them to overweight. A big contributor to the recent rally that we've seen since the war started is almost entirely driven by tech, and a lot of that is large-cap tech. And I'm just curious whether you think that's the component of the market that will continue to be a driver or if it will broaden out from here. Well, to be candid, we've actually been calling for this broadening. out for the last year and a half or so. And so our view was coming into 2026. We continued to be

very constructive on value. And think of value being cyclicals because we expect there to be this inflection higher in global industrial activity, global manufacturing. Our expectations for GDP were 2.5% plus coming into this year. And so really an underlying foundation for continued economic acceleration. What's changed, I guess, in terms of our upgrade of large caps is that we have seen the opportunity for some of the technology stocks, other sectors, parts of the industrials and utility sector, which perhaps were a bit vulnerable from a valuation perspective last year. We've seen that margin compression coincident with continued earnings growth expectations that have been ratcheted up. So as an equity investor,

if you look at, okay, you've got multiples that have come down a bit, plus earnings that are accelerating a faster pace than maybe you thought, and a continuation of stronger economic growth. We still like small caps, and we still like Japan, and we still like emerging markets. But this upgrade for us has been one where, frankly, we've been at Target for a large cap for a while based on the valuations. Yeah, and the room to run with the multiples. So to answer your question, which I didn't do, yes, we think that there's still some room to run, again, because of those improved earning expectations.

I think you did answer my question. I got where you were going with that. Chanel it's software. You expected to remain volatile for quite some time. We saw the IGV, I mean, move up eight sessions in a row. That was, you know, for many people, you know, it got to the point where perhaps it was a little stretched. Today we're seeing a big reversal of that. You expect that kind of pattern to continue for some time? We do expect it to stay choppy because we're still so early in this AI tradeoff of that world that we live in. You know, when we talk to our clients, they're more interested at this point into single stock exposure. Through us, they reflect that through structured investments. But you can see why. If you look at the IGV, there's a whole bunch of things in there that are not reflective of maybe the future world of software enabled by AI, Bitcoin-related companies, for example, you're getting exposures that are not that clear. You know, when I think about the software narrative, this is the one thing I think

that's most interesting. Vista has talked about this rule of 70. So many companies right now are rule of 40. If you expect a world where you're in the private markets, people are looking at rule of 70. That is a massive expansion in expectations of what you have to deliver to investors at the end of the day. And if we fast forward the next couple of years, I think we have to ask ourselves if investors in the public markets will feel the same, that they need more from the companies that they're investing in from a margin perspective or a revenue growth perspective because AI will help them get there. And software is the battleground for that. Yeah, that's what the team on Halftime was saying today about Service Now, just that the overall print was fine. They exceeded expectations.

It was fine. They blamed the Middle East for some of those contracts being delayed. But when you're in that software world, fine is not good enough. Alicia, you do also expect tech to really lead from here. Is it more in that large-cap space, that mag-7 space? So we like large-cap. We like tech. We are very cautious on software.

Again, like an eight-day bounce is a bounce. But I think the ultimate issue of what the terminal value is is still in question. And I think any question on the top line will feed directly into concerns about whether the client base of the software firms are actually buying. Can they raise fees on the per seat model? And so I think that's why if there's any shortfall on the revenue, that's why you got that big reaction. Because it confirms the actual question about what is the business model going forward. So we're cautious on that. But we think, look, we think tech is strong.

You can't get away from the earnings power and the margins on this. And it's still, with, you know, multiples came down so hard from November 1st into the end of, you know, really the end of February. And tech led on the way up, and we still think tech is fine. We love small cap here. We think it's great. We think we're on the reshoring cycle. We're in an industrial cycle.

We have global PMIs this morning, surprising to the upside. We think that theme is still working. And so we like the industrial. and of course aerospace. And Shannon, obviously a derivative of what we're seeing in software is the alternatives. They're taking a leg lower today. Blackstone reported this morning, beat on most of its metrics. There was some weakness in real estate. And then, of course, there's this continued question around wealth and direct lending. And all of that seems to play a role in what we're seeing with the movement in alts today. Do you feel like this space has

really hit a sentiment bottom yet? Or as... As more of these companies continue to report over the next couple weeks, we could see some choppiness. I think the important thing is that we need to really put aside how much of this is a structural issue with the BDCs and how much of this is really indicative of underlying stress, duress, or distress. And our view is that looking across the private credit landscape, we're not seeing that, you know, evolving concern in terms of these underlying companies being able to kind of meet their, meet their obligations, but also on a go-forward basis. And there's probably been, you know, a bit of

overreach in terms of the percentage of companies in this universe that are software-related, the percentage of those companies that are then, you know, potentially, you know, to Alicia's point, no longer going concerns. And so I think that our view is that, yes, there could continue to be, you know, a bit of a dampener on performance for these stocks. But remember, coming into 2025, everyone was so excited about the M&A cycle about this unleashing of distributions and private equity, we're still on the precipice of that. And so I think as we move into the second half of the year, there is an opportunity for people to see the other side of that coin

and maybe be able to take their focus away from some of the existing concerns and more to the overall strength of the private equity ecosystem. Yeah, Blackstone's still expecting this to be a record here for IPOs, at least according to that conference call earlier today. Thank you, Shannon, Shanali, and Alicia. Appreciate it. Intel is, of course, the big name reporting in overtime tonight. Our Christina Partsenevallis here with what investors need to be watching. Christina. It's a big name because shares have really just soared over 80% year-to-date, but the fundamentals

haven't necessarily caught up just yet. Start with supply. AI-driven demand for server chips is definitely surging. Those are the CPUs. But Intel said last quarter they can't make enough of them. They were selling off factory equipment just last summer thinking they wouldn't need it. They're ramping production up now and price increases should help margins, but they're definitely playing catch-up, so their guide will be key. If that guide is higher than the street, we could see the stock jump. On the PC front, personal computers rising memory costs are expected to push the market down close to roughly 10% this year, according to Bernstein, with double-digit declines in the back half.

Intel has rates prices to counter this issue, but they're still losing share to AMD in arm. And then, lastly, the foundry story, the manufacturing side. That's where all of the hype lives. Elon Musk's TerraFab, potential work with Google and Nvidia, but Intel's next generation manufacturing processes haven't proven out competitive just yet. There's been a lot of narrative around those processes and advanced packaging, but not a lot of concrete numbers just yet. Maybe we'll get it in the earnings call. Yeah. Hopes and dreams, but the actual ROI has yet to really be featured in some of those figures. Christina, thank you. Let's bring in Wedbush's

Matt Bryson for more on the Intel story. So this is a stock that has essentially doubled since its Q4 earnings. How many of the potential tail wins that we could hear tonight are already priced into the stock? It's really hard to say. So Christina just told you that they could give us a better number for Q2. I think they gave us a better number for Q2. It's very clear that the server chip pricing is moving higher. That should be. boost their, that their outlook. It's just Intel's not really trading on fundamentals anymore. Intel is trading on the hope that they are able to compete for all this new business, whether it's Foundry, whether it's AI-related compute demand. And so I don't know that they're going

to be able to tell us much that changes the kind of the view of whether or not they can what happens with that business. Yeah, it's trading at 60 times your estimates. Is this a company that you think can ultimately grow into that lofty multiple? And how far in the future are you expecting that revenue to actually support this kind of multiple? And that's really the struggle. So if Intel can get its fabs right, if they can get their chip design right, clearly

that the TAM has increased substantially from. you know, six years ago, seven years ago, when Intel was producing over $5 in earnings. And so if they can get those things right, then the sky's the limit. And they've been given kind of breadcrums suggesting that, yeah, there's potential that things get better, whether it's packaging, whether it's the TerraFab, 18A, maybe them having customers. But it's really hard to model it because it just hasn't happened yet. Right. And your price target is $30, right? Less than half of where it's currently trading?

Yeah. And that's, again, that's the struggle, right? 30 times for Intel historically would be a relatively expensive multiple. 60, I remember when Intel was trading in the low teens. And so, again, the struggle that I have is that the news flow this quarter has been great. But again, it's just really, really hard to model it out because there's no tangible numbers yet. Right. I want to ask you about chips generally. It sounds like you expect strong reports from the space for vendors with significant data center exposure. which specific names do you think are the most poised for upside there? Yeah, so if I had to pick one, it would be Invidia, right?

They consistently have beaten and raised. Everything in Taiwan sounds great. You got great numbers from TSM around their HPC exposure, which increasingly is driven by Invidium Broadcom. And in V-Vidia, you know, two, three straight quarters of, you know, basically hitting by-side expectations, and the stock just hasn't done a lot. And I expect that we're going to continue to do that. And at some point that the market realizes that growth isn't slowing, that concerns aren't

manifesting, and that, again, Nvidia moves back towards that that 30x multiple that it had held for the last two, three years. Right. All right. Well, Matt, thank you so much for breaking it down for us. We'll look forward to that report after the bell from Intel.

Thanks. We are also watching shares of META, Julia Borsden here with a look at what's driving that action, Julia. Well, Leslie, today meta confirming it will lay off 10% of its workforce. That's about 8,000 employees as it continues investing in AI.

Now, these job cuts are set to begin on May 20th. And with the news of these cuts, META is also dropping plans to hire people for 6,000 open roles. The sources tell me that a key factor behind these layoffs is AI, the fact that AI is enabling workers to do more. The company has encouraged its employees to use AI to write code. There's also the fact that MET is spending so much on AI infrastructure. The company expects capital expenditure spending could reach $135 billion this year. Now, back in January, meta laid off 10% of the staff who was focused on Metaverse-related projects,

and just last month laid off several hundred employees across a range of units, including Facebook and reality labs. Now, today's news comes ahead of Meta's earnings, which are next Wednesday, capital expenditures, and the return on those AI investments will be very much in focus. Leslie? Yeah, yeah, but a quintessential story about how AI is impacting jobs from all sorts of angles. Julia, thank you for that. Let's send it over to Simomodi for a look at the biggest names moving into the close. Hey, Sima.

Hey, Leslie, we got our eyes on software service now. Delivering a narrow quarterly beat and revised up its AI annual contract value this year to $1.5 billion from a billion. But that wasn't enough to quiet down displacement concerns with disappointing subscription revenue growth. Morgan Stanley KeyBank among the analysts cutting their price target on the stock with shares down nearly 17% on the day. Let's switch to Thermo Fisher Scientific. It's also down double digits on the day, despite strong results. in the first quarter and increasing its full year guidance, comments from the lab equipment giant CEO could be weighing on the stock. Mark Casper said the Iranwar could create some modest level of inflationary pressure.

And Comcast, having its best day in nearly three years as the company touts its growth in wireless and moderating broadband losses in the first quarter. Co-CEO-C-Eau also said streaming platform Peacock is set to achieve profitability for the first time. Next quarter shares up nearly 9%. Les. All right, Seema, thank you. We are just getting started. Up next, more on the software sell-off. The IGV on PACE for its worst day in a year.

We'll talk to one CEO about the risk and reward in the software space. We're live from the New York Stock Exchange. You're watching closing bell on CNBC. Welcome back. Software Stocks taking a dive today, reversing eight straight days of gains. Service now on pace for its worst day ever after quarterly results added to fears of AI disruption, Joining me now to discuss the Subit Dewan ProofPoint CEO, Sumit, great to have you here. So, you know, Service Now is the first of the major software names to report this season.

Its stock is, of course, plummeting today, despite beating on pretty much every metric. What does that tell you about the sentiment and how quickly sentiment is shifting with regard to software names right now? Yeah, Leslie, first of all, thanks for having me. You know, clearly the volatility in the overall software sector, as we have seen, been high and generally my assessment is that investors as well as marketplaces understanding that different software companies across different industry sectors as well as whatever value they provide have different durable value okay for example when you look at cybersecurity cybersecurity we are seeing the interest in the cybersecurity software because of

AI is higher than ever before two weeks ago or three weeks ago or three years weeks ago, we had the mythos announcement from cybersecurity perspective, and we are seeing customers very quickly address that particular vulnerability through cybersecurity technologies. And secondly, the platform providers that become critical for enterprises to partner with in going through the journey of enablement of AI becomes important. Now, that does drive volatility. We have seen in the past some good days for the IG. and now because of, you know, even though ServiceNow, you can argue, had good results,

you know, any sort of specific signal that investors see may not be great. They all of a certain get spooked. But overall, my perspective is that there are this clear trend in the market from customers to look for durable partners as software providers to help them with the agentic adoption. And I want to go back to what you said about mythos because that's been a huge topic in not just the software and cybersecurity space, but just broadly for the economy. This is the anthropic model that the company said is so powerful. It can find vulnerabilities in software that underpins everything from banks to power grids and other critical entities. Do you see this is something that makes the incumbent cybersecurity companies more important?

or does it make them, you know, does it show some of the flaws and potential weaknesses of the existing structures? Well, the existing process gets challenged because if you think about the traditional cybersecurity model was to operate on a human speed of identifying vulnerabilities and then prioritizing them and fixing them, and that sometimes takes weeks, months, sometimes years. The problem now is the exploits get created, even faster than the vulnerabilities are identified by the enterprises. So really, you need compensating and complementary controls. Enterprises can't rely on that old process.

Coming back to your question on what happens to the software providers and the partners that have provided technology. I think technologies that provide that complementary controls become more important. ProofPoint, for example, defense exploits coming in while the vulnerabilities are still getting patched. That becomes a critical layer. Something that defends endpoints so that vulnerabilities are patched quickly becomes a critical layer. So that's how customers are looking for.

Technologies that are preventing exploits from coming in while the vulnerabilities are getting patched. And providers that help them patch vulnerabilities fast, those two are becoming critical solutions. And many times they're coming from existing software partners that customers are using as cyber security players anyways. Have you had conversations since Mythos has come into the broader nomenclature? Just about what ProofPoint provides and where it fits into this world, that if Mythos were unleashed more broadly, what that would mean? Well, first of all, unfortunately, mythos are all of these models that are unleashed broadly

in some extent. And what we are seeing is that at this point at time, there are two questions that CIOs ask. question is, you know, or even CEOs, hey, how quickly can we address all these vulnerabilities that these frontier models find? Natural question. Well, the answer of them no one likes because it takes time to address them. The second question normally is, well, what are you going to do until that's done? And that's where proof point comes in. Because all of these exploits are going to come into the enterprise through human social engineering, through attacks that are targeting either human or AI at this point at time. And ProofPoint is that first line

of defense. So all of our ProofPoint customers, we've got 85 plus out of Fortune 100, you're all protected through very high degree of defense. And those who really are looking for that protection while their vulnerabilities need to be fixed, they need a solution like ProofPoint to make sure that they're fully guarded. And how, because you're using AI as part of just, just, your next iteration of that defense, how would you kind of characterize the ability to transition the business model in the world of AI? So much has been made of, you know,

we won't be charging on a per seat basis, we'll be charging on a consumption basis. We have to be using more AI, and the line between software and AI is becoming more blended. How are you at ProofPoint, you know, taking that all in, and what is it meant for your business and its ability to transition in this new world? Yeah, we are starting to see now business model, pricing models move towards not just seat-based,

but as humans start using agents, as they have AI agents, there's no agents just sort of are today accompanying humans. They are oftentimes working on behalf of humans. So as businesses were providing software, today, for example, we offer solutions that are, okay, how many seats do you want? and then what type of activities or throughput or tasks your AI agents are doing that we are protecting, and you're sort of capitalizing on both fronts. So let's say if a single human has 60, 80 agents that some people have predicted they are going to have, companies like ProofPoint, for example, in our pricing model,

we are going to monetize the number of seats of humans, as well as all the throughput and activity of AI agents. So we do benefit as the AI agents grow, even if that comes at the expense. of seats. Right. It's a, it's a complicated world and not all software company is alike. We appreciate you coming on today's Tumi to share your thoughts on everything that's going on. Appreciate it. Thank you, Leslie. We are getting some news out of the Fed. Steve Lee'sman here with those details. Hey, Steve. Hey, Leslie, this is right up your alley here. Banking Regulators reducing the community banking leverage ratio from 9% to 8%. This is something you proposed back in November. Now they've taken the formal action to do so. Banks are allowed also not to

meet this leverage criteria for four quarters, and that's up from two quarters, some regulatory relief coming for community banks. The new rule will allow more banks to qualify for this easier way to comply with the capital rules. Think of it like this. It's a way that you can just take the standard tax deduction rather than itemizing your exemptions. It's an easier way for community banks. So 4,000 community banks would now be eligible. Under the existing rule, Leslie, about, it looks like a couple, 1,500 or so, we're taking, double-checking the number, 1600, we're taking advantage of it now, up to 4,000 will be eligible. The ABA, the American Bank Association, had said that this is going to free up about $65 billion

in balance, inciting the agency's own research on this. So, Leslie, I just think it's an important thing to log in, because we are in the process of regulatory relief coming from the Fed and other banking agencies under. Michelle Bowman under the Trump administration, and this is just one piece of that. Yeah, this is, you're right, right up my alley, Steve. The purpose of all of this, I would presume, is to allow for more lending to be done by community banks. Is that right? That's one piece of it. The other piece of it is that they don't have to use these very,

very complicated Basel three rules to meet their capital ratios and do all of this extra work that's very hard for community banks. had this leverage ratio that 9% so that they could make it easier for them. But not enough banks were taking it up. So they lowered it down to eight, which is still within the statutory allowed amount to do so. To see if more banks take it up and they're able to reduce the regulatory burden. I think, you know, Leslie, you were here. I think I know I was here when they passed Dodd-Frank.

And the question is, did Dodd-Frank go too far? Could it be eased back a little bit? and we still have a healthy banking, well-capitalized banking system, and this is the area we're exploring right now. Yeah, that's the important balance that they're trying to strike. And you're right, that's what we've heard from Fed officials and other bank regulators under this new administration, not new administration, but under this administration

and what they plan to do for banks. Steve, thank you so much. Steve Leasman. Coming up, stocks moving lower as we head into the close at Yardini is standing by with his market call and the one beaten down sector. G-C sees as a buying opportunity. Closing Bell is back after this break.

Welcome back. Stocks are pulling back after reaching record highs earlier in this session. For more, I'm joined by Ed Yardinney, President of Yardinney Research. Good to see you in person. You have a 7,700 target for the S&P. Right. You still think it's achievable. Yeah, I think it's achievable. I mean, it didn't look quite as achievable back on March 30th when we made low on the pullback.

But it's been a remarkable recovery. I think it's been because the earnings story is good, and the reason for that is because the economy is amazingly resilient. It is. So you think that March 30th low is the low? I think that was the low, yes. And we will not be testing those levels again. I don't think we will.

It doesn't come with a money back guarantee, but I think what's going to continue to power the market higher is earnings. I think we had a pretty significant sell-off that offered a good opportunity. The problem is everybody now knows. that geopolitical crises are great buying opportunities. So when we get one, you don't really have much time to act. You know, I mean, the fear is still there. And so it takes quite a bit of guts to kind of jump in and say,

well, I think the war is over when it's clearly even now, not necessarily over. But as you mentioned, the economy is resilient. Correct. It's much less lever to energy than perhaps it was in previous situations like this. What do you think that means for rates? We had the confirmation hearing earlier this week for the potential chair, Warsh. You disagree that the Fed should cut the Fed funds rate. You know, I mean, the Fed's been talking about, or there's been talk about the Fed cutting interest rates all year.

I'm just not in that camp. I don't think the economy needs it. It's doing just fine. Inflation is still above 2% target, especially now with this surge in energy prices. And I'm not quite sure what. lower rates are going to do, they're not going to really help the labor market, in my opinion. What they'll probably do is just increase speculative excesses, and that's the last thing we need right now.

Given all of this, you are moving overweight in energy. We've seen so far there's been an inverse correlation between energy prices and the stock market. Do you believe they can go up in tandem, or are you overweight as a hedge to your broader equity? We've had a bit of a sell-off here in the energy. stocks and I just saw that as an opportunity that if you haven't been in the sector to you know the sector is only like three four percent of the market capitalization of the S&P 500 so when you're talking about overweight you're not talking about a big number maybe five to ten percent of a portfolio

and by the ways a lot of these stocks pay really good dividends they've been around for a long long time and especially the ones that are going to rebuild some of the infrastructure in the middle east that's been destroyed or needs repaired they're going to do that's going to do quite well for a while. So I kind of view it as a hedge against the possibility that, hey, maybe this war really isn't over yet. You know, the problem is, on our side, Washington thinks we've won the war on the Iranian side, there's nobody to surrender. I mean, it's the president's rightly pointing out that we took out their leadership, and now we don't know who to talk to. And so then what happens next?

Well, I think we have this stalemate in the Middle East, because the Iranian is just are not, our leaderless is the bottom line. But yet the oil market's telling me that one way or the other, the oil is getting out. I mean, Saudi Arabia has got the pipelines to get six to seven million barrels a day out. I think there's also going to be increased production from other places. And I think, unfortunately, Washington is being forced to kind of look the other way with regards to Russia selling oil to China and India. And I think that's taking some of the pressure off.

So this could be a kind of a stalemate situation, but that doesn't necessarily mean that that's going to be cause a recession or create some problems for the U.S. economy. The earnings story is still good. And as you said, the energy intensity of the U.S. is much lower. I think now if you look at gas lead consumption, it's like less than 2% of total consumption. And it had been more like 5% back, you know, 20 years ago. So we're definitely less reliant on energy. Yeah, it's a remarkably small proportion of consumer wallet spend. Especially compared to what we're used to historically.

Edgar Denny, thanks so much. Thank you. Good to chat with you today. Up next, we're just a few minutes away from Intel's report. We'll tell you what matters most after the break. The market zone is next. Welcome back. We are now in the closing bell market zone.

Mike Santoli and HSBC's Max Ketner are here to break down these crucial moments of the trading day. Plus, Pippa Stevens is looking at the big move in oil, plus the setup on Baker Hughes's results out in overtime. And Christina Parts-Nevilis has one last look at that Intel report before they report. Mike, let's send it over to you. Yeah, I mean, Leslie, we actually got another minor test today midday of the market's ability to withstand any hint that maybe things aren't as resolved as has been priced in in Iran. market seems to have passed that test mostly. Even as I continue to say, the broad indexes are kind of digesting and consolidating that huge sprint that we got for three weeks off of the March 30th lows.

I think the question here is, you know, how much can semiconductors and AI and power stocks really carry things for a while? We'll have to see our earnings reactions set up right here because even though past two quarters, we've had great earnings results, those have not necessarily propelled the overall index is broadly higher because you did have kind of a sell-of-the-news response. So I think we're in the process of sorting all that out right here. You know, I don't think the market gave you too much to worry about incrementally today, but there is a question as to, you know, whether we can get by with just those particular sectors working.

Yeah, that's a good point. Mike, we look forward to you in overtime today. Let's get to Pippa Stevens for a look at what's happening in the energy market. Well, Leslie, all the prices did jump today with Brent getting as high as 10740 following a report. from Israel's Channel 12 news that Iran's top negotiator has resigned from his role in the talks with the U.S. The report noting it was due to interference from the country's Revolutionary Guard, and there are some concerns in the market. This will ultimately lead to Tehran taking a harder line in negotiations. Now, after the bell, we'll hear from Baker Hughes providing a window into how production looks in the Middle East.

The company has a regional hub in Saudi Arabia and also has investments in the UAE, Qatar, Kuwait, and Oman. Evercore ISI noting that the company has more product revenue than peers, which has experienced more disruption than the services side of the business. So the firm has an outperform rating on the stock, noting exposure to the secular natural gas theme as well as its footprint in the LNG industry. Leslie? All right, PIPA, we'll look forward to that PIPA Stevens for us. Now let's get back to Christina for a final look at Intel before that report. Yeah, we've got three things to watch with Intel's earnings tonight. First you got it tonight this afternoon, next 10 minutes.

First, servers AI demand for data center chips are booming, and Intel is definitely charging more for them, but they are supply constraints, so they need to ship more volume to really move the needle. Second, PCs, memory is getting more expensive, making the whole PC complex more expensive, and some analysts think shipments could fall double digits in the second half of this year. Intel has definitely also raised prices to offset that, but it may not be enough. Third, the foundry business, the manufacturing side, Intel wants to make chips for other companies. The headlines have been definitely flashy TerraFab with Elon Musk, a deeper collaboration with Google, but the next generation manufacturing technology, we could say, isn't necessarily proven just yet. Where are the customers? And, of course, the real customer revenue is still maybe a 2028 story.

So that's what we need to see. The guide was conservative last quarter, so the bar for a beat might actually be low, Leslie. All right, Christina. Thanks for watching that story for us. Let's get to HSBC's Max Ketner, as we, approach today is closed. Max, I see you believe sentiment positioning still screaming by right now. How much further do you think the market can go? Yeah, I think it will depend on the next two weeks, particularly on the mega cap earnings, but I don't think you want to be underweight stocks here

going into those earnings, particularly not after what we've heard from the likes of Micron and Broadcom, but also by some of the Asian tech names over the last month. So I really would struggle to find a particular bearish reason to be underweight tech or bearish on the tech side. So I do think that in the next two weeks, that's probably the sector. And those names, they can propel us a bit higher, perhaps to new all-time highs once again. And what is, you just mentioned, what is very, very striking is that despite us being at an all-time high, particularly systematic positioning, the likes of volatility target strategies or CTAs and momentum players, they are still quite underweight.

So they continue to be the mechanic buyers of even those mini-debts like we see today. And I see that you're bullish in other spaces, too. Heavily overweight EM rates and overweight high-yield credit as well as gold. Why? So, look, for us, it's basically we're pretty much bullish on every risk acid that we can, whether it's high-yield, whether it's emerging market credit, whether it's emerging market local currency debt, whether it's equities. It's really across the risk-asset spectrum.

on perhaps high-year-old credit a little lesser, given that we're only about 20-25 basis points away from the all-time tights. So I think it's more like a carrier and an emerging market rate story. Gold, look, I think to be bearish on gold at this juncture, I think you've got to make a picture that those sort of liquidation moves like we've had in the first three and a half weeks

of the Middle East conflict, that those will repeat once again. You've got to make a case for central banks selling once again for investors, particularly retail. investors having to liquidate gold-long positions in order to service the stop losses and equities. I think that's a little much. You've got to come up with a really bearish positioning and really bearish story, given the underlying short position of systematic investors here. I see.

In terms of earnings, do you feel like what you've seen so far with regard to the results and the market reaction still falls into that bullish category for you? Yeah, still very much so. Because in fact, when we look ahead of the Q1 reporting season, particularly from the mega caps, from the really big ones that we're going to see report over the next two weeks, what we've heard was effectively the most foolish guidance, the biggest positive relative to negative three-enounce lib ratio,

ahead of the Q1 reporting season, really the most positive one, since the first quarter of 2021, since the depths of COVID. So that really, I think, is quite a bullish event.