Closing Bell - Closing Bell: Trump Pleads Not Guilty to 34 Felony Counts in Arraignment 4/4/23

Episode Date: April 4, 2023

Former President Trump appeared in a New York City court today. We have instant analysis and updates from Washington DC and from outside the courthouse. Plus, the key levels every investor needs to watch from Options Play’s Jessica Inskip. And, market expert Mike Santoli gives his Last Word before the close. 

All right, Tyler, thank you very much. Good afternoon, everybody. You are looking at a live shot there on the right side of your screen inside that courthouse in lower Manhattan, where former President Trump currently is being arraigned. He has already pled not guilty to 34 counts of falsifying business records. We're going to continue to monitor those proceedings for you as we await the former president's departure from the courthouse. And of course, we are going to show that to you live. In the meantime, let me welcome all of you to Closing Bell, where we continue to watch the stock market today from Post 9 here at the New York Stock Exchange. We do begin with fresh concerns about the economy, a new report showing job openings are increasing. Good news, perhaps, for the Fed, because that's what they'd like to see. It is yet another sign, however, that the economy is slowing perhaps that growth is continuing to slow want to show you the scorecard with 60 minutes to go now in regulation stocks have been in the red for much of the day and that is currently the picture more the cyclical names taking us lower today

like energy and materials and industrials as well, those being the biggest losers of the session. Oil, it's been on a bit of a tear lately, a bit more muted in the session today. And then, of course, as you see crude here, barely moving. It's just sitting at just about $80 a barrel. Technology, a big story of late, as you know, a bit weaker again as the Nasdaq loses some of its recent steam and that coming even as interest rates fall on those fresh concerns I mentioned to you a moment ago about the outlook for the economy. It does bring us to our talk of the tape. What is the state of this year's rally? Is it on the rocks or soon to continue? Let's ask Anastasia Amoroso, chief investment strategist

at iCapital. And I'll ask to beg your pardon if I have to interrupt you and show you those pictures of the former president leaving the courthouse just a few blocks from where we're located here. But in the meantime, the state of the market to you is what? Well, I think it's some consolidation after a stellar rally that we had last week. I mean, the S&P was up 3.4 percent. Tech is up well over 20 percent. So we've really moved a long ways in a short period of time. But we got a little bit weak economic data. You know, Scott, you mentioned job openings. We also got the manufacturing report that disappointed somewhat. And then the GDP

was tracking 3.2 percent. Now it's tracking 1.7 percent. So, you know, that is kind of the cause for consolidation. But that still doesn't deter me from saying that I think we can have a more positive tone to April, because if you look at the broader picture, we sort of have the recipe for a soft landing, which is inflation expectations are coming down and broadly speaking, economic data is surprising to the upside. So that actually still supports the resilient stock market. I just wonder, you know, if we had the ingredients for a soft landing, whether we threw something sort of rancid in the stew, if you will, and that being what happened with the banks and now fresh concerns about what may happen with credit from here. Yeah, that's right. So it's an interesting part of the business cycle because I think we are just about to be done with tightening. And if you think about how stocks perform, they don't perform well during the tightening phase. But what happens after tightening is sort of this relief that is to say, OK, we may be done with the rate increases. That's behind us. But the economy is not weak enough. And I think that's where we're sort of headed. And then eventually, Scott, I think the second order

effects do come to roost. And that's what eventually causes a recession. So I don't think we're in that scenario now. And the banking turmoil for now, to me, is contained, you know, if not all the issues have been fully solved. I've got, you know, seasonality, as you mentioned, you know, April's good economic data, as we learned yet again today, not so much. Which sort of wins the day if that scenario continues, right? You know that April is one of the best months traditionally of the year, but if the data continues to come in showing weakness, that's going to rule the day, isn't it? Yeah, but think about the starting point for the data. We were coming into the year thinking that we're going to get 0% GDP growth. And instead, even if it's 1.7%, guess what? That's still better

than the call for the recession or growth or no growth that we've had. So I think what's likely to happen, companies will start reporting their earnings just next week. And the typical earnings downgrade is about 3% kind of quarter proceeding to the reporting season. Now we've downgraded those estimates by 6%. And if you looked at the negative pre-announcements, they've been much higher than in prior quarters as well. So Scott, I think the bar has been reset pretty significantly lower. And even if we don't get the 3 percent GDP, 1.7 might be enough for the positive surprises to the earnings picture. I am wondering whether earnings are going to be a help because they don't come in as bad as feared or a hindrance because it's a reminder of just where we're heading, especially when you get the

commentary from the companies, not the numbers themselves, but what all of these CEOs, men and women, have to say about the trajectory for the economy. But I would think they're more encouraged today than they were in the beginning of the year. And once again, because economic resilience actually surprised. You think encouraged? I mean, I think so. They've sort of reduced the estimate so much. I mean, if you look at semiconductors, they've cut down a lot. If you look at tech companies, if you look at the average software company, for example, they significantly revised down their guidance. And now you have a scenario where inflation is easing. The Fed is sort of being forced to pause. And a lot of them have probably baked in the continuation of the

hiking cycle. And then the economy, this consumer is stomaching 5 percent rate. So I actually think they might be a little bit less pessimistic than they were sounding at the beginning of the year. I don't know. I'm looking at one of the most prominent CEOs in America today in his letter, his annual letter, Jamie Diamond. As I write this letter, the current crisis is not over. And even when it is behind us, there will be repercussions from it for years to come. Any crisis that damages Americans' trust in their banks damages all banks. I mean, he goes on and on about thinking that we're not out of the woods quite yet, even though he'd be the first to say, and he does in the letter, that it's not 2008 all over again.

But nonetheless, it doesn't have to be to be potentially bad. Well, he's absolutely right to highlight the ongoing concerns for the banking sector. The reality is if you're a bank and you're competing with 5% Fed funds rate, you have to pay up for those deposits. So what's going to happen is the cost of funds for regional banks is going to have to go up if they are to keep the deposits there. And at the same time, yeah, I think he highlights in the letter the health and maturity issue. If all of a sudden deposits go out and you have to move those health and maturity securities to available for sale, you take a mark down on those assets. So that issue has not been solved yet. And Scott, then the next test for the banking sector is going to be commercial real estate. You know, I do think

the defaults there are yet to come. And so he's right to kind of highlight that as one of the issues that's not been solved. So let's add Nicole to the conversation. She's sitting right next to you, of course, Nicole Webb of Wealth Enhancement Group. The other issue, welcome, I wanted to get into was the offsides nature of how the market has caught people this year. Technology has been the big winner up until the last couple of days. Energy has been the big loser, certainly far from what people expected might be the case as we came into the year. What do we think about that? Absolute bifurcation here. So we're seeing a lot of the returns from Q1 coming from 20 names. Again, you talk about the technology rally, where that's coming from specifically. And look,

from our perspective, the technology rally, a lot of these names were unjustly beat up last year. We're not shocked by the run back up, but also we don't think that these valuations are sustainable if the Fed doesn't give what is expected, which is cuts in the second half of this year. And our expectation is not for that. We think that as long as there's wiggle room available to the Fed because of the job market, because of the structural deficiencies of labor, that they're going to continue to take on that. So you don't think the Fed's going to cut this year at all? We really don't. We are of the higher than expected, longer than expected. And unless there's some structural changes to the labor market, that this is going to be a holding pattern that we sit in for some time. You do like tech, though, at least some parts of it, Amazon,

Netflix, for example. So I mean, if you think we're in an environment that's going to continue to bring rates higher, I can't imagine that the NASDAQ, even if there's not necessarily a direct correlation to that, is going to perform well in that scenario. And from our perspective, where we sit advising clients, we have to barbell both to the value and the growth scenario. So looking at some of these names, two of which you mentioned, we are positive on the outlook for 2024. And we think the price entry point right now is positive. Look, what we are fighting through today is we are still absorbing the 40% increase to the money supply. Yes, we have the sharp downturn in M2, but those two have to even each other out yet.

And we have this expectation that the Fed does take us higher as long as the jobs market allows us to. So the strength and the resilience of the consumer leaves wiggle room for profits to come down. And we do believe that we are going to be in this wide trading range through the end of this year. Anastasia, how would you address the issue of technology, whether it still has steam to go, whether this week is a reminder that energy is not dead just yet and that those stocks are going to be able to do well. Well, I think the barbell approach makes sense in terms of technology and energy and also dividend stocks. What I want to say on technology, I think people are going to find themselves in chasing mode when it comes to technology. Tech has outperformed a lot, but guess what? Hedge funds are still underweight.

They've been adding. Mutual funds have gone underweight, especially some of the big tech names. So, and if you look at the landscape today, you've got a huge reset in valuations. And at the same time, these big tech companies are benefiting from AI. You know, the semiconductors are benefiting from all the secular tailwinds, and their inventory issues are in the process of getting corrected. So I think you're still going to find growth in technology at much better valuations that we've had. And again, that chase is, to me, what keeps the

sector moving higher. Let's just take, Nicole, today as an example of, you know, if we got fresh concerns about the economy, that more cyclical areas of the market are the ones that, not surprisingly, are having trouble today, industrials, energy, as we're just talking about, but materials and things like that. Do you want to stay away from those or go into those at this particular time? At this particular time, it's a million-dollar question. I would say, though, that, you know, our firm's perspective is that this is an entry point on both ends of the barbell, to your point exactly, which is we have to remain agnostic to the direction that we should be expectant of additional rate hikes in the future, that they're not done yet. And with that, you know, we couple it with the strength and resilience we're seeing in other data pockets. And we believe that this is an opportunity for us. Again, more opportunity in 2024.

So, Anastasia, are we in an environment where bad news is now bad news? Right, because you know exactly where I'm going with that. It was flipped for a while, all based on what everything would mean for what the Fed does. Today is, as I said, a reminder that, look, the economy appears to be slowing. Today is a reminder of that. Is it a one-day blip? Is bad news bad news again? I mean, I think it is a one-day story for now. I mean, the economy is already slowing. I mean, I think it is a one-day story for now. I mean, the economy is already slowed. I mean, Scott, if you look at manufacturing numbers, for example,

we have already been well below 50 for a period of time. So, you know, if we kind of tread water around here, that's not all that bad. And again, the economy has slowed. It was expecting to go into a recession, and it's not. So actually, if bad news just means that GDP is growing below potential while inflation is slowing, that's not actually bad news for the Fed. So I guess I wouldn't kind of misinterpret and read into one data point just today. Fed perspective, if you go deeper into the March meeting, it appears that their expectation is for negative growth in the

back half of this year. Simply, if you look a little bit beyond kind of where they expected GDP numbers to be for the year, given what we expect for Q1, it starts to really lead to a narrative for negative GDP in the second half, which plays again into this plot line for we believe they take us a bit further yet. You know what I'm wondering, and I'd like both of you to answer this question. Nicole, I'll begin with you. What's priced in? What do you think's priced in to the market, which, you know, went from recession to, OK, well, maybe it's going to be a soft to no landing. You heard that narrative being put forward. Now, after the bank issue,

it's back to are we going into a recession? And maybe now that's pulled forward. Stock market, not necessarily reflecting that from the beginning of the year. So what is priced in? Conversationally with clients, what we continue to tell them about Q1 being priced in is a lot of concentration. So, again, focused on the growth and technology run up. And at this point, you know, the expectation, what is being priced in is cuts on the back half of this year and the expectation that the worst of it is behind us, meaning that the October lows we hit, we likely won't retest again. And when we get anywhere close to that, we see a buyback up in the market. And so

what's priced in is that the worst of it is a bit behind us and that this expectation that the Fed has to pivot near the end of this year? I think what's priced in depends on where you look in the market. And if I look to rates, then what's priced in is a significant economic slowdown that the Fed is going to have to react to. That's not our base case. And one place that I would look to sort of capitalize on this dislocation is energy. Energy has suffered, but it's now going to be moving. The oil market is going to be moving from a surplus into a deficit, especially with the recent cut. So I actually think what's priced in and is dislocated is energy because mobility around the world is just starting to

pick up. Okay. Ladies, thank you so much. That's Anastasia Amoroso and Nicole Webb joining us here at Post 9. We still, as you can see on the right-hand side of your screen here, are awaiting former President Trump to emerge from the courtroom where he is currently being arraigned. 34 counts we now know related to the falsifying of business records. He has pled not guilty. We saw a still photo from inside the courtroom as live cameras are not allowed in. We just have this one in the hallway here.

In the meantime, I'd like to go to Eamon Javers, who's down in Washington, D.C., for us, thinking about all of this, how it might be playing in the nation's capital, and what may happen now, Eamon. Scott, well, we do have a little bit of additional information to bring you right now. We can tell you that all 34 counts here are felony counts. It was a little unclear in the initial reporting whether all of these were felony counts. We are now told from an NBC producer on site in the courtroom that that is the case. All are felony counts. So we'll wait and see as we're

looking at these live images now from inside the courthouse when the former president is removed from that hearing room and makes his way back out to his motorcade to head back down to Florida. He's been in there for just over 45 minutes now. We were told initially that this process could be relatively quick, just a matter of minutes. So we would expect this maybe not to go even a full hour, but we'll wait and see. All of this is unprecedented. There are security concerns. There's a robust legal team on both sides here. You can imagine everybody will want to have the opportunity to say their piece inside the courtroom,

and we'll find out about all of it when they emerge from there. But we're monitoring that for you, Scott. But we can tell you that as of right now, all 34 counts are felony counts. Scott, back over to you. Back to you, certainly, as necessary. It's been a bit of a spectacle, a couple handfuls of blocks from the New York Stock Exchange today outside that courthouse where our contessa Brewer has been since early this morning. Now, contessa, you await former President Trump's departure.

Just give us an idea of what the scene is like now. You're talking about reporters and photographers from all around the world who've crammed into, as you said, just a couple city blocks. So you're dealing with that. And then, Scott, hundreds, maybe thousands of protesters. It's hard for me to judge from my vantage point how many people are actually out here, but they have filled the entire, about a city square block across from the courthouse. Some Trump supporters, some who insist that the former president needs to be held accountable

for the accusations that have been leveled against him. And then outside here, you're seeing an immense police presence. We have choppers overhead, barricades that are lining these sidewalks and blocking crosswalks and blocking off streets all around this courthouse. So what we anticipate is when the hearing is all said and done and the former president leaves the courthouse, he will come out a side entrance, get back into his convoy again.

And his ultimate destination is, even though New York City has been his home for so many decades, he now considers his point of reference Florida. So he'll head back down to Mar-a-Lago and has scheduled a news conference there, reportedly with friends by his side, one of them Marjorie Taylor Greene, who we saw show up at this park earlier today. But it was such a crush that she came, she spoke a few words, and then she left, even though she had really been promoting that on social media. We also saw the Long Island Congressman George Santos here as well. And then for him to escape, he was actually scurrying through the shrubbery to get out of here.

So again, you have a lot of people who've been here for hours waiting for any potential glimpse of the former president, though they didn't get it. And then now, again, waiting to see whether he'll come out, whether he'll address reporters as well in that hallway that we saw a little bit earlier. And as Eamon laid out, we're still waiting on news of the indictment itself. We know that there were 34 felonies for falsifying business records and for conspiracy as well. But we'll continue to wait and watch this scene down here, as you said, just blocks from where you are. Yeah. And I'm going to come back to you at some point in this process, too. So stand by for me. Contessa Brewer, who is just outside the criminal courthouse in lower Manhattan, where she's been all day long covering this historic proceeding today involving the former president of the United States.

In the meantime, as we continue to watch the markets, we do have about 40 minutes to go before we do close trading out today. Don't fight the Fed, which probably isn't finished raising rates. That is the word from our next guest. Gary Kaminsky is the chairman of Magnify Plus, the former Morgan Stanley Wealth Management vice chairman as well. And he is back with me at Postnight. It's good to see you again. Good to see you. What a day to be downtown. I'll tell you what. So you describe yourself as cautious broadly, but not bearish. What does that mean? Well, I think what the first quarter showed you, Scott, is that if you are an investor, you have to be invested. And I was surprised with the averages. Averages obviously was skewed by a couple of big stocks. But this is a time where

don't fight the Fed is not some cliche that is not known by almost all investors. But we're raising rates. The Fed is going to continue to raise rates. And now is a time not to speculate in equities, but to make certain that you know what you own. The markets have always operated in cycles. I've seen it for close to 40 years now. That's where we are. But you know, as well as anybody in the markets that you've watched over those four decades, you don't fight the Fed forever. And the Fed is certainly closer to the end than the beginning. So at what point do we start to think over the rainbow, so to speak, when they're done? Well, again, I've listened to many people talk about it over the last six months. And the real simple answer is nobody knows. My personal opinion is I think the Fed is going to overshoot this time. They got it wrong with

inflation. It wasn't transitory. And I think that their belief now is to overshoot. So in that case, is it six months before the end of the tightening cycle? Six months? You think that long? No, I don't know when the market starts to look forward. I have no idea. When I listen to people prognosticate about a pause and that now you've got to be fully invested on that basis, I don't think anyone knows the real answer.

What I do, you have to have an opinion on interest rates. It's probably the most single important factor as it is with equity investing. Do they have, they peaked? I do not believe they've peaked. I think the Fed is determined to overshoot this cycle, and I would not be surprised personally to see a 6% terminal rate. Really? You think they would go that high even after what we witnessed with SVB and what is still expected to be credit tightening? Well, that's what they want. They don't want the whole system to blow up. But that's why there was

a backstop put in place to sort of mitigate what happened with SVB. I do not think that this is the end of, I don't call it a banking crisis. I don't believe this is the end of what we saw a couple of weeks back. I think you've got this duration mismatch at a number of banks, given what has happened in terms of funding and in terms of assets. So that is something that the Fed is not upset that this will have an impact in credit tightening. At the end of the day, raising interest rates, that's what that's about. You agree with Diamond then, right?

Jamie Diamond, JPM in his annual shareholder letter. As I write this letter, the current crisis is not yet over. And even when it is behind us, there will be repercussions from it for years to come. I would agree. I think that the way assets are moving to the big banks will have ramifications in terms of the ability for smaller businesses to get credit. I think that's what Jamie's talking about in that letter. I don't think it's a crisis. I think this is the type of movement that happens when interest rates are going up. Interest rates go up for a reason. And this is exactly what the Federal Reserve is trying to do in terms of slowing down the economy, because inflation is what the target market is.

Would you own the banks here? Well, the kind of stocks that I would own in this part of the cycle are companies that pay dividends and distributions and reinvest those dividends and distributions in their own businesses when they're not paying it out to shareholders. Because we are in the time of the cycle. You know, I've never lost fact of the fact that depending on when your starting point is, 40 to 60 percent of the return of equities over the long term, the 10 percent number that's thrown out there all the time, half of that is dividends and distributions reinvested. It's not capital appreciation. It's not talked about that much. But you're in the part of the cycle now with

the equity markets where companies that pay you dividends and distributions is much more important than capital appreciation. I'm listening to you as I continue to watch these pictures, which is why I'm looking away as we wait for the former president to emerge from the courtroom after the arraignment. And we're going to deal with that as as it sees fit. Certainly magnify. I mentioned in the introduction what you're doing now. This is like a financial search engine for investors. When you talk about different parts of the market, this is a way that they, as I understand it, search to be able to invest in different securities and or asset classes? Yeah, so Magnify has been called the Google of finance. For whatever

reason, if you go into Google and you type in something about an investment product, it's not going to direct you to exactly how you invest. The Magnify language, which was created by Tiffin, which is an incubator of fintech companies. I was an investor. I joined the board three years ago, and now I'm helping run one of the businesses. If I had watched your interview with Fish yesterday, Mark Fisher, and he talked about natural gas and why you would want to get long natural gas at this point in the investment cycle, but you didn't know exactly how to do it. You could go to Magnify. You could type in using natural language search, I want to invest in natural gas long.

What Magnify does, it will give you ETFs, mutual funds. You can sort it based on performance. So it does it by performance, by fees. So it's not just giving you random ideas. Hey, go buy XYZ fund. You are able to go into the search bar and what it does, comparing it to, let's say, decades ago, this information was not readily available to individual investors or professional wealth managers. You know, in the old days, if a wealth manager had a client who

wanted to invest in a certain sector, ETF, space in the marketplace, they'd have to deal with a product specialist. They'd have to deal with a wholesaler. This information is now readily available at just basically going into your laptop and typing it in. And so what we've tried to do is democratize this information for the general public. I'm going to stop you from speaking, Gary, because former President Trump has just emerged from the courtroom where he was arraigned. He is now on his way towards exiting that courthouse in lower Manhattan. Just to recap exactly what's taken place here, 34 counts related to the falsifying of business records. The former President Trump pleading not guilty in that courtroom

in what really is a historic moment for this country. We think that the former president is going to head back to Palm Beach, where he will hold an event a little bit later on this country. We think that the former president is going to head back to Palm Beach, where he will hold an event a little bit later on this evening. The Manhattan District Attorney, who brought these charges in the first place with the grand jury, is holding a news event at some point as well. So we may hear from D.A. Bragg at some point. I want to go right now. Eamon Javers, we've been waiting for this moment. We have more details and you may even have more than what you had just a few moments ago as we waited for former President Trump to emerge. Well, we've now seen him leave, Scott. And as you say,

he was in the hearing room for just under an hour by my clock. That's a little bit longer than we were told to expect. These proceedings can sometimes move quicker than that even, but obviously given the security concerns, the need to coordinate transportation and all the rest, this is a more cumbersome process than we've seen maybe ever in that hearing room. We're watching the exterior now as we wait for the former president to leave. I can see Boris Epstein, the political aide there, to the former president to leave. I can see Boris Epstein, the political aide there to the former president of the United States standing by, waiting for Donald Trump to leave. We still do not have the actual indictment here, Scott. So we're looking for the actual details of these 34

counts to figure out the allegations and the evidence behind what the DA says are 34 felonies committed by Donald J. Trump. We don't have that information yet as we see the president now emerging from the courthouse. We expect that we will see it soon. We also expect that we'll hear from the former president today. Once he gets back to Florida, we expect he's going to go more or less straight to LaGuardia, fly back down to Mar-a-Lago, and we'll hear from him later this afternoon or this evening, Scott. Back over to you. Eamon, I'm going to go to Contessa Brewer, who's on the ground.

Contessa just set the stage here. The scene, what it looks like now as the former president has officially exited the building, and he is in one of those vehicles in that caravan that's going to head, as Eamon thinks, to the airport. The real question that we've had, Scott, is whether the former president would take a caravan that's going to head as Amon thinks to the airport. The real question that we've had, Scott, is whether the former president would take a moment and try to speak with reporters in that hallway outside of court. It may have been that the barriers that were set up inside that corridor kept reporters

and photographers separated from the path the former president was taking. But again, when he walked outside, we did not see him doing any sort of big triumphant wave to anyone outside of there. This is all happening just around the corner. And I'll have my photographer pan off of me and show you. I'm standing at the main entrance of the courthouse. And you can see here where the barricades are set up and the officers lined up on Hogan Place, the former president would have come out of that door and now getting in the motorcade, as you can see, and taking off from these lower Manhattan streets. This is very near that main thoroughfare on the east side of Manhattan called the FDR,

which would be a straight shot to the airport if that's where he goes. I also want to mention it used to be when he was in New York City a lot more than he is now. We would see him going down to the helicopter port just off of the East River. And often executives will use that helicopter port to fly to the local airports just to avoid traffic. Not really a problem if you're getting a police escort and you've got a convoy clearing the path for you. Here outside, this has remained a subdued crowd ever since the former president went into the courtroom today to face those charges, to enter the plea of not guilty. We've had almost no noise, a very calm crowd since that moment.

It was a rowdy morning, but it looks like really the somber nature of what's at stake here has settled in across this group. As you allude to, Contessa, forgive me, a historic day, no doubt. I heard you describe earlier this morning and some of your shots as you were waiting for the former president to arrive. We continue to watch his motorcade leave the area, that there were a few scuffles between pro and anti-Trump factions down there. Of course, the New York City mayor, Eric Adams, warning all who expected to show up to, quote, be on your best behavior.

It appears from at least your descriptions of what we've witnessed today that people took heed to that. Yeah, you know, for the most part, it has been very calm down here. Early this morning, when tensions may have been running high in anticipation of Trump's arrival down here at the courthouse, we did see the anti-Trump demonstrators spreading out this massive banner in the park that said, Trump always lies. And then we saw a young woman wearing a MAGA hat sort of run out onto this massive flag, reach down to try and snatch it up and run with it, and then she slipped and fell.

And there was a physical scuffle. It looked like to me there was, there may have been at least one punch, and now we're hearing the noise starting again, now that they know that he has left the courthouse again. But for the most part, what we've seen is even though initially they were trying to keep the factions separated, once they were mixed, they seem to be fairly calm. Contestant, I'm going to take it back from you, of course. I guess I spoke a little too soon for some of the protesters anyway who are outside. That's our contestant Brewer

outside the criminal courthouse in lower Manhattan. I'll go back to Eamon Javers in Washington as we continue to watch the former president's motorcade there just around the Brooklyn Bridge area of the FDR, it looks like, as it makes its way a little bit more north. And to what, Eamon, you had told us was likely LaGuardia Airport as former President Trump heads back down to Palm Beach in Mar-a-Lago, where he is expected to hold that event this evening. And it should be noted as well, unless you have something that I don't know, that the indictment has still not been made public, as you alluded to a few minutes ago. That's right, Scott.

We don't have the indictment yet. I did just see on the camera monitoring the courtroom itself that members of the media have now been allowed to exit the courtroom. And they all were hustling out very quickly with cell phones to their ears, pens in their hands and notebooks in their hands and hustling off to filing locations. So presumably they will be filing details of these counts very soon as well. So we might be just minutes away from learning quite a bit more about what's in this case here at this point. But at some point, we will also get the actual document, the charging document, the indictment itself, and see what evidence the district attorney is putting forth here in the court papers. We'll also be hearing from the district attorney, we're told, about 345 this afternoon. Alvin Bragg expected to make a statement at a press conference here

there in Manhattan. So we will see that as well and get more detail from him. Unclear. That's in less than 15 minutes time. So unclear whether we'll see the indictment document before we hear from the D.A. or after we hear from the D.A. But you can imagine, Scott, just enormous interest in what exactly the president's been charged with here. Yeah. And we'll come back to you if, in fact, we do learn that within 25 or so minutes we have left before the close here. I have the luxury of having a live picture from where the D.A. looks like he's going to have his news event as well. And they continue to get set up there as we wait for sort of multiple events to still take place surrounding this case throughout the rest of the afternoon. Eamon, thank you. As I said, back to you as needed as well. Let's touch the market to a bit more than 25 minutes to go here

as we've just turned the hour past three thirty. Dow is still down about two hundred and forty points. It has been that way for much of the session on concerns that the economy is continuing to slow, putting pressure on stocks. Our next guest sees opportunity in the group at the center of the turmoil, the banks. Let's bring in Bruce Richards now. He's the CEO of Marathon Asset Management, overseeing upwards of some $20 billion. We make a bit of a left turn, literally, to you as we continue to watch the former president make his way out of Manhattan. Bruce Richards here. When we talk about opportunity you see in the banks, we're not really talking on the equity side. We're talking to your wheelhouse,

which is on the debt side, correct? Yeah. For the equity side, what I would say is, you know, these regional banks, there's a lot of regional banks, there's literally thousands of small and regional banks. You're going to have a real problem with earnings coming up because the NIM, which is net interest margin, is really getting squeezed as the cost of funding is going up and their loan book is yesteryear's levels of 4% rate on their fixed rates. And so you're going to see NIM really getting squeezed, which means they're going to have to probably look to cut the dividend. And the equities haven't really focused on that yet.

I understand that KB is down 35% the the index of equities from the highs in February but you're gonna start to see an earnings problem coming next so there's liquidity problem and a earnings problem here that afflicts us. So when when Diamond, Jamie Diamond says as I write this letter the current crisis is not yet, you're nodding your head in agreement? It's not even close to being over. It's just starting because you've seen a trillion dollars of deposits leave the small banks in the regional bank system and it's gone into the money market funds. So that's number one. And number two is you also have a trillion dollars of debt coming due in the commercial real estate arena between now and the end of next year, as well as the CNI loans, which are starting to go sideways.

So the banks also, in addition to having a liquidity problem and a capital raising problem right now, they're also going to have a problem with loan performance as the year progresses and we move closer to that recession that you alluded to. So you're looking for defaults? Well, there's a few things here. First of all, in terms of the opportunity with the banks, we've been able to buy certain banks, regional banks. Just before coming here, I looked at about a dozen on a report that we're focused on. In the last week, the bond prices have fallen to $0.50, $0.60 a dollar of these banks.

So we're earning 11%, 12% current yield. Meanwhile, the book value is in excess of the equity capitalization so we're doing our screens and we're looking for opportunity to buy into a falling market and and buy some of the debt itself we're buying assets out of banks as well and we have a calling effort into banks to buy more of their assets because they have to shrink their balance sheet that's's for sure. And I think the final point of that whole arrangement is, is the banks are unable to really lend middle market lenders and private credit lenders. The shadow banking system is going to step up in a very big way to fill this void. Really important for corporate America and for real estate, which is moving towards a train wreck. I mean, the other, you

know, I want to, you know, somebody you know, I'm sure, in that side of the business, Mark Lazzari, who, when he is here, I talk to about the same issue, this direct lending and the idea of the yield that you can get. What yield are you getting right now on the money that you're lending out? 12 to 14 percent. Double digits. Yes. And you anticipate that continuing?

Absolutely. The base rate has moved up from zero to 14 percent. Double digits. Yes. And you anticipate that continuing? Absolutely. The base rate has moved up from zero to five percent, the base rate being the SOFA rate, and spreads are then, you know, spread off of that five percent. So it's the best lending environment that we've seen in a generation, which is why it's a particularly interesting time for lenders like Marathon and Mark Lazzari's firm, Avenue Avenue to be in the marketplace to lend to companies because the banking system won't be there to make those loans like they had in the past. And super important that we provide this capital solution. You made a quick buck or 30 million of them in Credit Suisse debt. Correct. debt, correct? How does that factor into how you think of the European bank troubles versus the troubles you perceive to be here, arguably at a smaller level, because it's more at the regional

level, whereas in Europe, it's the big national banks. Right. Well, in Europe, I think Europe's in a pretty good place. There are a couple banks that we're focused on, and I'd say that there's more to come there. But what Sergio and Coleman will be doing at UBS, we think, is to absorb Credit Suisse and to run that bank brilliantly. And so we think the ECB will stand there to be lender when there's any kind of cracks. But here in the United States, the cracks are here in a very meaningful way in the regional banking system,

where there are literally about 300 banks that we think need to raise capital, aren't potentially gonna be able to raise that capital, and are gonna have to be selling down assets. And the whole time, we think the deposit outflow will continue and it will come in waves. And so I think that the Fed will stand up and provide all the liquidity they need to provide. And they have a huge toolbox that they learned from 08 that they can deploy. So I think the liquidity will actually be OK. It'll be a slow bleed, and it'll be the banks shrinking. And so that's not very good for the, I think, you know, the banking system in general.

Really what it means is weaker equity prices for regional banks. Well, how do you think about the risk, and if you just bring it back to SVB, even on the bond side? I mean, you know, depositors were saved, equity holders, bond holders, sorry. How does that factor into the way you think about this whole scenario? Yeah, well, I would think that depositors should be saved, first of all, because depositors can't do the work that the regulators can do, and the regulators didn't do the work that perhaps they should have done. And so deposits shouldn't lose money.

And I think Janet Yellen and J-PAL don't have the tools right now to make deposits whole. So they have to go slowly to protect the deposits and seize those banks and have an orderly liquidation of a bank. I think that there is risk for the creditors. There is risk for those AT1 bonds over in Europe. But I think generally speaking, we're looking for the banks that trade above the book value in terms of where the equity capitalization is. And that's when we're going to want to go out and buy bonds.

But when we see the big crack, which is the positive outflow, it's time to maybe pull in your risk there. I appreciate you coming in on what has been an extraordinarily busy day for us. Bruce Richards, thank you. Thank you. Bruce, of course, of Marathon Asset Management. We are now getting details of the indictment. Eamon Javers, back to you. Scott, we do have the statement of facts here, which just came out and was released by the DA's office moments ago. And this case is pretty much as advertised. We're seeing these 34 counts of falsifying business records in New York State. The essence of the case is laid out by the DA here.

It's more than just Stormy Daniels, though. There's more to this case than just that. The DA here is saying that after the election, the defendant reimbursed lawyer A, that's Michael Cohen, for the illegal payment through a series of monthly checks from the Donald J. Trump Revocable Trust, a trust that was created under the laws of New York, which held Trump Organization entity assets after the defendant was elected president. Each check was processed by the Trump Organization. Each check was disguised as a payment for legal services rendered in a given month of 2017. The payment records kept and maintained by the Trump Organization were false New York

business records. In truth, there was no retainer agreement and Lawyer A was not being paid for legal services rendered in 2017. The defendant caused his entity's business records to be falsified to disguise his and others' criminal conduct. There's additional detail here in this statement of facts, which runs about 13 pages. Scott, I'll give you one of them, which is related to suppressing a story by a doorman about the former president of the United States. They're saying, the DA is saying here that in or about October or November of

2015 the AMI CEO that is the media company CEO learned that a former Trump Tower doorman was trying to sell information regarding a child that the defendant had allegedly fathered out of wedlock at the AMI CEOs direction AMI negotiated and signed an agreement to pay the doorman $30,000 to acquire exclusive rights to that story. AMI falsely characterized this payment in AMI's books and records, including its general ledger. So that is an allegation that has been floating around out there, reported a long time ago, now making its way into this statement of facts here by the DA. We're going to hear from him in just a couple of moments time, so we'll get additional detail. And of course, we'll go through the rest of this document

and bring you any more information that's in the closing pages of it. Scott, back over to you. Do we know, Eamon, when a trial would take place? And I can't even begin to imagine the process of trying to seat a jury in this case, just considering how polarizing the former president is. Sure. I mean, there's almost nobody in this case, just considering how polarizing the former president is. Sure. I mean, there's almost nobody in this country who doesn't have an opinion about Donald Trump. Right. And in Manhattan, Trump has made the case that he can't get a fair trial because it's a very liberal city. It's a very blue city in a blue state. He did float the idea on social media of maybe moving it to Staten Island, the Manhattan borough where he got the most support.

It might be a more favorable venue for him. We don't have any idea what the timeline of this is going to be, Scott. It will be certainly months before we see any trial in this case. And I would imagine we're going to see a whole bunch of motions. We're going to get discovery here. We'll be the next step. The defense side will get access to a whole lot of information that they didn't have access to that the Manhattan DA has had in terms of what's in this case. And they'll

be able to go through the evidence very carefully and they'll be able to find additional evidence of their own. That will take a long period of time. I don't think we're going to see a trial. We'll see. Maybe we'll see that trial in 2023. Not betting on it. Yeah, be interesting to follow. Eamon Jabbers, thanks so much for your coverage today. That's Eamon down in Washington, D.C. We had been watching the former president still on his way north up the FDR here on the east side of Manhattan as he makes his way to what we think is going to be a trip down to Mar-a-Lago where he holds an event in Palm Beach later on this evening. About 15 minutes or so to go until the closing bell. Christina Partinevalos has a look at the key stocks to watch as we approach the end. Christina? Well, the end. But Sirius XM right now is the biggest lagger on the Nasdaq, down about 3% after CFO Sean Sullivan announced he is stepping down to pursue

other opportunities at another public firm. We don't know which one, but he's been in that role since 2020 and will be replaced by senior VPN controller Thomas Barry. Shares are down 2.8 percent. C3 AI shares are plummeting down about 26 percent right now after a company. Sorry, after short seller Carriesdale did say that this company, C3AI, is engaged in accounting malpractice. C3AI's shares have actually soared about 200 percent just up until April 3rd. All of the chat GPT and AI have hype. But today that stock is actually having its worst drop on record. C3AI denies the allegations, but will have that short seller Carriesisdale Capital, on closing bell over time in less than an hour.

Scott. Okay. Christina, thank you. That's Christina Partsinevalos. We're now in the closing bell market zone. CNBC Senior Markets Commentator Mike Santoli here to break down these crucial moments of the trading day. Plus, option plays Jessica Inskip on why the technicals are still flashing a bullish signal. Sima Modi as well on Caterpillar's latest drop, which she flagged for all of us earlier.

Get to all of you in a minute. Santoli, we begin with you first. So we've been down throughout the day. But yet again, even the pullbacks aren't of great magnitude. Not yet. It's still pretty orderly. The damage is being somewhat mitigated by modest declines in the big growth stocks, as well as just traditional defensives are doing OK. So, you know, you look at things like the Russell 2000. It's ugly. It's

2.2 percent drop. The S&P 500 is having this little bit of chop at a very logical spot high under the range it's been in place since last spring. You did get a little bit overbought in the short term. You did have some extreme bit overbought in the short term. You did have some extreme outperformance by a small segment of stocks. So far, again, pretty orderly is the process. The other part of it is nothing has changed about April being positive, about the fact that sentiment and positioning are relatively defensive and cautious right here, which is something the market could theoretically feed off of.

I just wonder how much erosion you can see below the surface and things like regional banks going down 2 percent a day and the small caps suffering without pulling back. We're trading within Friday's range just for framing purposes in the S&P. A lot of it depends, too, on just how the market wants to take the news and how it perceives various news items to be. I bring up Joltz, for example, which if you're watching that and you're the Fed, you're saying, OK, finally, it moves in the right direction, although then it gets spun into, well, see, the economy is starting to slow. The reaction today definitely had a tint of harder landing. And we have days like this and then we have days where it looks fine.

Maybe the ISM services tomorrow is going to be one of these relief releases. I do think there's an oddity about this week, too, which is, as we've said, the jobs report coming on Friday when the market's closed, investors can't react to it. So we're reacting to whatever we know about the labor market now. So maybe that's going to be ADP tomorrow. Maybe it's going to be weekly claims on Thursday. The real number, you're not going to be able to basically pull the trigger either way. You still have such a unique relationship between the bond market and the Fed, if you want to put it that way.

Bond yields are down. That market just doesn't believe that the Fed is going to be able to continue to raise rates. No, it's going to try and look through the next move, try and look through the next month or two of data, and try and essentially say not just where are try and look through the next month or two of data and try and essentially say not just where are we headed in terms of the economy, but what's the direction of surprise from here? And so the market does not believe there's a very high chance of re-acceleration in the economy. There's a much higher chance of a further financial accident or a sharp slowdown. And that's why if you're putting on the what might happen trade,

it takes the form of projecting potential rate cuts, even when no person sits here and says, I fully expect there to be two or three rate cuts by the end of this year, unless you feel like disaster is coming. And what's so interesting, Jessica and Skip, is that you still think the technicals have a pretty decent story to tell? I certainly do. So I believe it's stuck in the middle. So the S&P 500 has been range bound and we're struggling to find direction. And the lower part of the range is really a base forming. And so I look at three things. One is the big picture, which is the 200 weekly moving average. I look at the slope of the line and then where the index is above or below. And then I also look at the 26 and 40 weekly average to give me the trading cycle, if it's bullish or bearish. And that's really important because

that's two and three quarters worth of data. And as investors, we look at the market from a quarterly basis. So if we see consistent closes above the 26 and 40 weekly moving averages, and that's indicative that from quarter to quarter, earning cycle to earning cycle, we're actually seeing price increases. And so that is consistently happening within the S&P 500. It's early stages. But to continue seeing this bottom, I want to see the continuous closes above the 26 and 40 weekly moving average. That's around 39.50. And as long as we have those continuous closes, our next milestone, which is where we're having a very hard time closing right now, is that November lower high

of 4,100. And then followed by that, I need to see the January 30th high of 4,195. So it's important to form a base to see those levels consistently closed above. But even more so, I need to see that November lower high to be overcome because, of course, the way that we define a trend is lower lows is going to tell us the bear trend and then higher lows, higher highs would shift us into a bullish trend. So I need to see those levels overcome. And just like the gentleman to my left, who I'm going to bring back into the conversation in a second, you're looking at the Equal Weight Index, too. Tell us, in what way does that stand out to you? Yeah, it's extremely important. A fair rule even states that a broad-based rally holds more strength. So the equal weight is showing early signs. We've only closed last week

above the 26 and 40 weekly moving averages, and we actually fell below it today. So I'm looking at 63.20 as our Jan high target that we need to overcome. But right now it's 58.40 that the equal weight index needs to overcome to have those consistent 26 and 40 weekly. So two and three quarters closes above to indicate a base, which is a positive trading cycle. And it's so important to take note of that because even if you look at the equal weight or the broader S&P 500 or the S&P 500 from early 2000, you can see that we consistently closed above these weekly levels at the end of bear markets. And the inverse is also true, notably the dot-com bubble, great financial crisis, all of the above. I feel like she's speaking your language, Mr. Santoli. Sure. No, it always makes

sense to keep an eye on it. And the fourth quarter, it vastly outperformed. And through January, the equal weight vastly outperformed. You've given back some of that built-up credit, if you want to say it like that, that the rally had earned based on how broad it was and based on all those momentum signals. So a lot of the calls in January of this type of thrust only happens at the beginning of a bull market. Some of that has rolled over, but not in a critical way. So I still do think, OK, you want to call it just a trading range until proven otherwise or an uptrend, because we actually have still maintained this stair-step pattern

since October. I think right now the market has registered properly the idea that we have a flattening out of earnings. I don't think the overall market is priced in something more precipitous than that. We might not get it. We still have this unusual cycle of, you know, pricing power in parts of the economy and earnings estimates down this quarter as much as they were in the prior two. And yet once we got the reports in, the market was OK with them. Jessica, I'm looking at crude oil, which has obviously had a great week. It's still sitting above 80. And there are technicians out there who suggest that this trend is being confirmed by the action this week. And I'm wondering how you see that. That's absolutely true. There was bullish divergence within crude oil, specifically at 80. And so that actually yesterday in the production cuts was the catalyst that was needed to support that support system for crude oil, causing a reason for it to be sent higher.

And that, of course, could trickle down into inflation and the other concerns that affect the broader markets. Something to pay attention to. Yeah, and we will. Thank you, Jessica. And Sima Modi, you flagged this earlier. We did it on halftime as we talked about what was happening in Caterpillar today. I remember, you know, there were some other names, too. URI, Deere, Eaton. As we worry about where the economy is

going, you have to take a look at these names. And just got to flag that U.S. manufacturing report, Scott, which really did raise some real concerns with new orders tumbling, every subsector coming in below 50. We haven't seen that since 2009. Listen, when we started the year, there was this longstanding thesis that the industrials will be able to outperform in a slowdown. And that's because there are these secular tailwinds like the Infrastructure Act, the surge in global commodities. That's one of the reasons John Deere has been able to outperform over the past year. But clearly some concerns about a slowdown in construction lending. There's been a new note from Citi passed around looking

at how 61 percent of banks are tightening their lending standards to construction lending, which we know the commercial real estate sector. But the effect that's going to have, the downstream effect on construction and land development. We're talking about companies like Caterpillar that makes tractors and excavators. If you see construction drying up, that's going to affect demand. So we'll get the full story, of course, in two to three weeks when these companies report earnings. Scott. Yeah. And I would imagine, boy, their outlooks are going to be cloudy at best, just given some of that. I mean, look, manufacturing, as you know, SEMA has already been in recession. Now, if we get into a point of more significant concerns about the

economy, you're going to see it show up first and foremost in not only this name, but the other ones you mentioned, too. And the conversation, you know, from CEO Jim Muppleby at Caterpillar, from John May at Deere has been, well, it's the supply chain that's stopping us from reaching us, from reaching our, you know, outmost capacity, utmost capacity. So the question now is whether those challenges are starting to mitigate a little bit. And if so, if that helps their demand story going into the second half of this year. All right, Seema, thank you for that. I'll turn back to Mike Santoli. We're still a minute or two away from the two minute warning as we normally get to. I'm looking at the Nasdaq today. It's been, what, two or three days in a row. But yet, you know, Apple even earlier today, though it was lower and it is now, not by much.

Not much. The reflex is still in place. When you do have yields crack, the tech stocks aren't going down that much because it's sort of growth is going to be scarce. We know the reaction. Semis have definitely rolled a little bit off very kind of hot levels, I'd say. And, you know, you see obviously Tesla's been a drag on the index, too. Again, it's all within a pretty contained range. It's not doing a whole lot. The industrial side of things is kind of fascinating because that whole kind of capital goods story was very much in vogue coming into this year. You also see the really bad ISM

number yesterday, ISM manufacturing, which was unequivocally weak. And yet, if you look at what happens to the stock market six months after ISM is in that zone, it's actually one of the more positive. So it's almost in so bad it's good range for risk assets. We can talk about why that is and whether that cycle is going to apply this time. But it is, in fact, the case. And for something like CAT, I noticed the street is very lukewarm on it, does not have an over preponderance of buy ratings on it. And earnings estimates have been going up.

So it's very difficult to say, oh, this is an overloved sector. It's coming down. Construction employment has been stubbornly high. Everyone's expecting that to come down. The Fed wants to see that to come down. In the Jolt's report today, more construction job openings than the prior month. So it's a noisy environment. Maybe it's because of the government programs. Maybe it's because of just pent up projects. But it is sort of interesting to see the market try to digest it. On the index level, we knew we knew 4100 was going to be another line in the sand.

And boy, here we go. Yeah, there's no doubt about it. 41 to 42. It's wild how we're making so much of these levels. It reminds me of prior prolonged sideways periods relatively recently, like in 2015, where you felt like it's not going to give you another chance to sell the same level, is it? And then it gave you another chance, at least in the short term. I'm also in that camp, as Jessica was saying.

If you pull back just below $4,000, you're still just giving up like three days' worth of upside. It all still looks like it's in decent shape. And again, I'll go back to the seasonal and sentiment stuff is definitely not working against you in a big way. You can't take a lot of bad economic data. You can't take a lot more bank stress and keep it held together. But for now, I think a lot of these things are kind of offsetting as opposed to just all working in a direction of much lower prices. Want to hit the Russell for me? It is by far the biggest loser today. It is down more than 2% as we approach that two-minute warning. Regional banks, First Republic today is down 5.3%.

And I'm sure if we showed you a board of others, they would show a similar story. Yeah, and the relationship between anything like the NASDAQ 100 and the Russell 2000 looked extremely stretched coming into the week. So the expectation would be, you know, QQQ down and Russell 2000 at least outperforming. That really hasn't held up. So we'll see. Credit has been in decent shape but softening a bit this week. All that stuff moves in the direction of, I guess we're going to have to worry a little more about the Russell.

So they don't look expensive. There's things like the S&P small cap 600. As a matter of fact, looks like it really has priced in a pretty dire earning scenario. The Russell 2000 is lower quality. It's tough to find sponsorship for those type of stocks in this environment right here. So it feels like nobody feels like there's a hurry to add risk, to add beta, to add leverage or anything like that. So maybe that probably insulates the downside, but it doesn't get the market moving in the short term. Nobody sort of looking to take away risk necessarily yet either.

I'm looking as we were talking and you were just now at the VIX. Yeah. 19. Yeah. And it was down seven days in a row. 19 is an absolute level, is unremarkable. But the index itself has been really placid. And when that happens, when you go these long stretches of time where the index is in a range, that's going to happen. Now, you know, you're up a half a point on the VIX.

It's not nothing. You could look at that. And, you know, it's been the area where you've had these turns higher. And that usually means that the S&P is stalled out or chopping lower. So we'll see if that does play out this time. But you're right. There's not been a big rush to get very hedged. And part of the reason is people have raised cash. You can see the flows into money market funds. You can see the fact that people, you know, the inflows into the T-bill ETF have been huge and consistent for weeks on end. So it doesn't feel as if people want to pay up for a 30-day downside put on the S&P when they feel like they have the cash cushion. Gold, $2,000 above that level again this week was the first time in a year that gold topped $2,000.

Gold's doing what it's supposed to do. By the way, I look at the 10-year return, it's 2% annualized for gold, right? So there are periods when it's going to work and conditions are right. Otherwise, you're paying to hold it. The bell's ringing. The former president arriving at the airport. We'll send it into overtime with Morgan. She's going to cover both stories for you.