Closing Bell - Closing Bell: Trust the Bounce or Stay Vigilant? 3/17/25

Episode Date: March 17, 2025

How believable is this bounce? Stocks jumping just after one of the quicker 10% corrections on record and just ahead of a big Fed meeting. So, what should investors do next? We discuss with Chris Hyzy from Merril & Bank of America Private Bank, Courtney Garcia from Payne Capital and JPMorgan’s Jordan Jackson. Plus, Evercore ISI’s Roger Altman tells us what President Trump’s tariffs and policy changes could mean for your money. And, 3Fourteen Capital’s Warren Pies breaks down why he sees some potential economic weakness ahead. 

And welcome to Closing Bell. Mike Santoli in for Scott Wapner today. We are live at Post 9 from the New York Stock Exchange. This make or break hour begins with stocks extending Friday's strong rebound rally as traders take heart in a quiet day on the tariff front and a better than feared retail sales report. Here's where we stand with 60 minutes to go in regulation. After a hesitant start to the week,

the S&P 500 clicked into gear right around midday. You see it's up more than 1% right now with industrials, energy, and financials taking the lead, building upon Friday's 2.1% pop in the S&P. The gains are coming despite some pressure from Nvidia and Tesla, as some Mag-7 names continue to sputter so far this year. You see Nvidia almost back to the flat line is still underperforming as Tesla loses more than 4%. That brings us to our talk of the day.

How believable is this bounce coming after one of the quicker 10% corrections on record and just ahead of a federal reserve meeting as risks flare up on both sides of the Fed mandate. Let's ask our panel Chris Heisey, CIO at Maryland Bank of America Private Bank. Courtney Garcia is Senior Wealth Advisor at Payne Capital Management. And Jordan Jackson is Global Market Strategist at JP Morgan.

Courtney, a CNBC contributor, welcome to you all. Chris, let's set this up here. I guess to know if maybe the correction has run its course, you might have to have some idea of what the correction was pricing in and reacting to and what the market's been contending with and whether we have some clues as to whether it's lifting. Part of it's seasonal. We've seen a lot of this, both in the economic data plus what goes on structure in the market wise, et cetera.

You had a lot of sell programs hit. If you're into the day-to-day activities, the tape of the day, a lot of cell programs hit, for obvious reasons, a lot of uncertainty, etc. But then there's always a high noise to signal ratio, soft data versus the hard data, and all this is coalescing in the last four to six weeks or so. The high-valued parts of the market obviously taking the hit, they're the big overhang, they're the anchor that brought it down. But that's what creates bargains for the areas that had nothing to do with anything of the uncertainty, whether it's tariffs or other things.

So we were out there thinking that in the next week or so, last week, you would get the selling exhausted. But it still needs a catalyst. It still needs confirmation that the biggest worry, which is growth, is really not going to unfold. And that's kind of where we're at right now. And we're in that moment of figuring out if growth is going to hold up or not? Yeah.

Yeah, I think you've got to start with the consumer first and foremost. You have to watch the consumer trends. It's still the engine. And, you know, we have 69 to 70 million households at the bank. We have very good data around the consumer. Still stable. A lot of this is seasonal. You do get that so-called, let me look for something cheaper.

Let me look at that replacement of where I'm gonna spend my money. And then as you get into the spring, you get further away from the bad weather as well. We think that trend actually starts to tick back up again and provide some of that confirmation that the consumer's okay. Courtney, part of what we are dealing with is, I think,

elevated expectations among investors coming into the year along with those higher valuations. And so the question right now is if this has been mostly positioning and the rate of change of growth in the economy has gone down and maybe first quarter earnings are getting cut 10% at the index level going down to PE points in the S&P over that time, either it creates an opportunity or presents a warning. How are you thinking about it? I think this is more of an opportunity and I think a lot of this downturn has been sentiment driven and I think the fact that this market has gone down so quickly on much more just sentiment being negative, much more so than the data actually reflecting that thus far, I think goes to show that. You just got the investor sentiment surveys. Bearishness levels are close to 60%.

And the highest that's been is 70% at like the worst of the 08, 09 recession, right? So I think, you know, barring some really big downturn, I don't know how much worse the sentiment can go. And that really, I think, leads to a buying opportunity. And it's not all of the markets that have gone down. About 95% of this downturn has been because of the Mag-7. You're seeing a lot of other areas

are actually holding up better. Like even today, you're seeing China's continuing to do well, Europe has been outperforming the US, healthcare has actually been holding up. There's a lot of places where as a diversified investor, you've actually been able to be more insulated here, but I think you wanna take advantage of this as a buying opportunity more than anything else.

Jordan, I mentioned that, you know, Friday and today were both days when there happened to be very few incremental headlines on tariff plans or a lot of the other initiatives that have been thrown out there by the administration that whatever the details are ultimately, the market is taking them as potentially short-term drags on growth even if they lead to a good outcome. So how are you thinking about the interplay between policy, making a best guess as to where it lands, and then how the markets are priced for?

You know, it's been really interesting. I think the markets are trying to find sort of this Trump put. I don't think it's really out there. It seems the administration has a very high pain threshold. And you know, the truth is, I fully anticipate that we are going to get some sort of round of tariffs coming to play on April 2nd And so I think we're probably at best looking at a bit of a choppy sideways market We could see some further downside, but again, this isn't a growth scare in my view just yet, right?

And so I think sort of the further downside is this sort of minimal I think we're closer to the bottom and we could start to catch a bit of bid on days like Friday and days like today So I do think we got to be a little bit careful here. Certainly a market would I be, you know, dollar cost averaging into some of the more unloved parts of the market that haven't kept up with the big tech trade over the last couple of years. But I think we have to be careful. Again, there seems to be a pretty high pain threshold that the current administration is willing to accept. Yeah, at least by their comments and outward appearances. Stay with me, everyone. Let's bring in CNBC senior economics correspondent,

Steve Leesman. For more on today's retail sales numbers, Steve, I guess gives us a little bit of a snapshot of what kind of consumer economy we're starting with here. Yeah, it was a weak report, Mike, with one asterisk. And I'll go through the numbers for you really quickly, and I'll show you where that asterisk is. The first thing is you came in at zero two, you missed expectations, you revised down the prior month.

So that was not a good start when you look at the actual data that was out there. Take out X autos a little bit better up zero three, but the issues that I have, Mike, with the numbers is you see that auto number just zero three. But the issues that I have, Mike, with the numbers is, you see that auto number just zero three? I think that number may be actually better than that. They reported a 16 million dollar, a 16 million unit month in February. So I think that could end up being a strength

that you might get revised higher. But in any event, you're not gonna revise it to a place that says, hoo, the consumer's doing fine here. We have some pressure here on the consumer. It could be sentiment. Diane Swank, the economist, is talking about pressure on the low consumer. So there are issues out there that have to be resolved, and I think you have these tariffs coming through that create more questions. For sure, in terms of questions. I guess that is one of the big debates though, Steve,

is you're seeing this plunge in consumer sentiment, frankly, alongside investor sentiment and CEO sentiment, the high noise level around policy and the idea that it seems haphazard and erratic and seems more concentrated on creating a little more friction in the economy than in resolving things. Maybe that accounts for the sentiment plunge.

The big question is whether that translates on a predictive basis into change behavior. Well, I think the American public has sort of embraced this idea from the economists rather than the administration that they will pay the tariffs. And that means essentially a tax hike that is coming to most Americans. That's what they believe. That means higher prices for them. And of course, as you know, the tariffs are a highly regressive tax. There is no progressivity to them, the extent to which lower income Americans rely upon

imported goods. They will pay a higher percentage of their income in that tax because it's the same tax if you make a billion or if you make $50,000. So that's really an issue and I think people see this coming and there's both uncertainty about what the policy is, but I also think, Mike, there is certainty that the policy will be bad for most people. Yeah, at least that seems to be the collective, you know, way the probabilities are being set anyway.

Steve, thanks very much. Chris, you know, to me it's more about the whipsaw between what people heard and kind of wanted to believe in terms of policy priorities and sequencing and what we're going to get initially. And now you have the administration really talking about pain before gain, and it's unclear whether investors at least have kind of built that into their expectations. Yeah, I think there's still great clouds out there. Investors are always gonna point to the certainty of earnings growth or earnings as the base.

And then they'll base their multiple on what the comfort level is, paying up for that earnings. So right now, earnings and the economy are somewhat in question, whether it's a growth scare, whether it's a soft patch, whatever it may be, weather-induced and sentiment-induced. As we get further more comfortable with the headline risk that's still out there across a number of different things, the consumer will come back, at least in our opinion. And as that happens and we get into earnings season, that's our next catalyst, even up ahead of the spring months

and some of the other discussions that is out there. So we look at this as like a butterfly market, one in which is erratic, directionless in the short term, it tries to gain that footing. And then you switch to an owl market, which is one that looks around 360 degrees for confirmation that indeed putting a dollar to work, a risk capital to work, and what Courtney said before, in a diversified manner, for the first time in years, which would work both geographically, sector-wise, et cetera.

And then finally, you move on to the eagle when you feel even more comfortable that, hey, we're okay here. And we're going to get through the other side and growth is actually picking back up. And that's how we see things between now and the end of the year. All right, so we're looking for the owl to show up is the way we're thinking about it.

Exactly. Yeah, okay. Courtney, you know, we've had, it's funny, because coming into this year, one of the things you heard most often was, we expect this market to broaden out. It's not just gonna be concentrated in a handful of sites. It's actually happened. It's not just going to be concentrated in a handful of stocks.

It's actually happened. It's broadened out globally. And to a large degree outside the MAG-7, the market has held up better. What does that tell us from here, I guess, if you're an index investor, if you're not, and how to think about it? I think this is much more than just a short-term change. I think this is going to be a longer-term trend that's happening. Even days like today, markets are recovering. It's not just the Mag-7. You're seeing the equal weight S&P is

doing really well. Last I looked, it was up like 1.6% today. So you're seeing the broad markets doing well. And internationally, I don't think anybody saw that coming with Trump in office. Everyone's saying, oh, stay away from China, stay away from Europe. It's outperforming and kind of in spite of that where they're saying, okay, we can't necessarily rely on the US as our growth source. And now I think you're going to see that here in the US where now they're trying to figure out, okay, what is our headline risk? Can we not rely on the administration and we really need to rely on the underlying fundamentals? And I don't think the underlying fundamentals have changed that much. We still have a really tight labor market. You still have wages growing. I think the

consumer is uncertain right now, but even back during COVID, you saw that and they didn't actually pull back on spending. So I don't know if you wanna actually make that translation at this point in time, but I think underlying things actually look really strong. But I think that broadening is likely gonna continue. You wanna make sure that you're taking advantage of that as an investor.

And Jordan, as we get ready for the Fed meeting, you know, starts tomorrow, by all appearances, Fed officials should not really want to lean too far in either direction here. They seem to want to stay out of the way while they let the data come through and the policy picture to be filled in a little bit. But what's your baseline assumption for how the Fed policy proceeds for this year? Sure.

So we don't think the Fed is going to make any changes next week. That's pretty much baked in. As you've highlighted, Mike, I think Powell's going going to make any changes next week. That's pretty much baked in. As you've highlighted, Mike, I think Powell's going to have to toe the line here. I think he can still, at least given the February CPI print and the PPI print, he can still talk about sort of this disinflationary trend intact. But we have to recognize that tariffs is likely going to start to impact the inflation narrative going forward.

But again, he's going to probably reiterate what he made last at the last press conference. We don't guess, we don't speculate, and we don't assume. Now, the path going forward, though, to some extent, I think it's pretty binary. I think the Fed is either going to cut a little, call it one or two times this year, or they're going to cut a lot in response to recession, not in between. So right now, the market's at around three. But again, the Fed's got to be careful because if tariffs start to feed through into the inflationary narrative,

monetary policy really doesn't have any impact on quelling sort of inflation fears from the supply side. And that's what tariffs would bring through. I would also say if the economy can weather this sort of policy uncertainty storm through the end of the year, we could be looking at additional fiscal stimulus over the course of next year. So they be careful

not to deliver too many rate cuts this year when you get sort of fiscal demand coming back online in twenty twenty six then they perhaps have to come back in high grades and that obviously contributing to both the supply side and the

demand side inflationary pressures for next year. So again I think the feds got to have a wait and see sort of approach here- and see how the data evolves particularly on the growth year. So again I think the feds got to have a wait and see sort of approach here- and see how the data evolves particularly on the growth side- but- I'm still in the camp of

they're probably going to cut fewer times this year. Versus what the markets got priced in currently. Chris there's a line of thinking that sort of taking shape it seems in the last few weeks let's say. Trying to suggest that you know you've

had treasurer secretary best and say hey we're talking the ten year Treasury yield. They feel like this message of fiscal restraint, maybe you have to accept a little bit of lower growth in the short term, tariffs, you know, you kind of take your medicine on that. And then down the road, either the bond market rallies and yields go down and that makes housing affordability better, or the Fed sees the way clear to cutting more. And I guess if you could make all those things happen

in a pretty harmonious way, you'd take it. Is that the way you would bet that things are gonna play out? Certainly nothing is as linear as that, especially when it comes to the credit markets or at least the yield curve. This has already been happening though. You talked about the rotation already happening,

and we talk about this a lot, but remember last year, you and I were talking about this before, it's already happening, and it just continued. Same thing with the yield curve. It's adjusting to the factors that are pulling through. It's adjusting to a lot of the so-called slowdown in growth. The yield curve will likely stay in this range

until a more material event occurs, whether growth slows a little bit more, or in fact, not necessarily inflation going up, but economic activity going back up. So you're probably looking at a yield curve that's right in this range between now and the end of the year. If the Fed does cut,

it will be because they're comfortable cutting, and that just simply means either growth and or inflation are going in their favor. Outside of that, there's really nothing material out there. I think you're looking at a boring fixed income market, which is back to fixed income versus total return, like we used to see. And every chance you get when spreads do widen out

for whatever reason, it's an opportunity to get a little bit of extra yield through the credit markets. Courtney, as much as it seems like there's so much extraordinary news flow around the administration and what's been going on, and really truly kind of almost attempting to break lots of relationships with allies and economic relationships domestically,

if you look at the market behavior and you say, oh, 10% corrections happen like, you know, on average once or twice a year historically, you know, often after two 20% up years, you get some payback in the S&P, post-election hangover, that kind of stuff. In other words, there's nothing necessarily going on in the markets that say, we got extraordinary things

feeding into this market. What do you say to any clients who come to you and say, how can I invest given all that's going on in here? And it seems as if there's a lot more risk in the atmosphere than I would have wanted. Well, I think you kind of hit the nail on the head there where I don't think the underlying economy or the underlying data is necessarily reflecting

what's happening in the market. So when you have this kind of sentiment driven rally, or this sentiment driven sell off, markets tend to be really positive. I think the average about 13% up over the next 12 months when you see this kind of a pullback. So this is absolutely an opportunity that you want to take advantage of.

And we've actually been getting a lot of clients who have been reaching out to us to see what they can do to take advantage of that, which if anything makes me a little nervous, I'm not seeing the like, let's sell, let's get out. You're not seeing this year panic, which makes me think, I don't know if we're at the end of this yet.

But I do think we're probably closer to that than anything and I would absolutely buy on this. Well, we did get to that 60% bearish survey a couple of weeks before we got to that low on Friday. So nothing is too precise in this business. Chris Courtney Jordan, thanks so much. Appreciate it. Thanks, Mike.

All right, let's send it over to Christina Partsenevelis for a look at the biggest names moving into the close. Hi, Christina. Hi, Mike. I actually want to start with shares of Reddit right now because they are jumping 8% and this is just news coming out that Google plans to expand its partnership with Reddit. This is as concerns grow that the social media platforms

user growth is just too reliant on Google search traffic, according to Reuters, the partnership now, among others, enables Reddit to use Google's AI platform to enhance its search functions. That's why Reddit is up almost 9%. Shares of a firm following them, though moving off session lows, as CNBC reports, Klarna will replace a firm in a lucrative exclusive partnership with Walmart. The move heightened the rivalry between a firm and Klarna, the two biggest players in

the buy now, pay later space, especially as Klarna prepares to go public. The firm shares are down over 6.5% right now. And shares of Norwegian gaining on a JP Morgan upgrade to overweight from neutral as analysts say that despite consumer pullback, conversations with executives show no changes in booking curves, cancellation rates, or slowing onboard spend. Shares are up almost 6%.

People still want a vacation, Mike. They do, I guess, out on the high seas. Thank you, Christina. We are just getting started. Up next, Evercore's Roger Altman standing by with what President Trump's tariffs and policy changes could mean for your money. He joins us after the break.

We are live from the New York Stock Exchange. You're watching Closing Bell on CNBC. I've been in the investment business for 35 years, and I can tell you that corrections are healthy. They're normal. What's not healthy is straight up that you get these your four at markets, that's how you get a financial crisis. It would have been much healthier if someone had put the brakes on in 06, 07.

We wouldn't have had the problems in 08. So I'm not worried about the markets over the long term. If we put good tax policy in place, deregulation and energy security, the markets will do great. That was Treasury Secretary Scott Besson yesterday on NBC's Meet the Press saying he's not worried about the state of the market following last week's correction. With all the major averages falling more than 10%. Joining me to discuss is Roger Altman, Evercore founder and senior chairman.

He's also former deputy US Treasury Secretary. Roger, it's great to have you here. I mean- Hi Mike, thanks for having me. For sure, any Treasury Secretary would and probably should say, let's not get too excited about a 10% pullback in the equity markets.

On the other hand, the idea that the policy mix right now is somehow kind of forestalling what would have been a financial crisis of some sort, perhaps because of the wide sustained deficits or anything like that. How do you think that all plays into the current environment? Well, you're right. He's saying more or less what any Treasury secretary would say in his shoes, although I think he might have added that they watch the markets carefully, which is a typical way of evidencing sensitivity to markets, which he did not say.

But look, I think the biggest issue out there right now is the health and attitude of the U.S. consumer. We saw a weaker retail sales data this morning. We saw a weaker index of consumer sentiment on Friday. A number of consumer products companies, although not all of them, are referring to consumer hesitation. And after all, consumer spending accounts for about 70 percent of US GDP. And in terms of why the consumer may be a little more conservative, I think it just has to be the blizzard of policy changes which we've seen over the first eight weeks of this administration, which are dizzying and may be intended to be so, but I think inevitably they've created some confusion

or at least some concern on the part of consumers who are now being more conservative. And if that continues or deepens, then we may see lower growth going forward that might otherwise have been the case, lower corporate profits, and probably some incremental downward pressure on inflation, which has implications for the Federal Reserve and other implications. It's interesting. Of course, Treasury Secretary Besant mentioned the deficit being around 6.7% of GDP last year, and almost everybody who observes those dynamics would suggest, look, long-term that can't be the way this continues.

This structural deficit, obviously interest payments well over a trillion dollars a year. Everybody would suggest you have to somehow try and, you know, either bend the curves on revenue or spending one way or the other. What's interesting in this case is that the blizzard, as you call it, of Doge activity, where they're kind of going out there and just sort of on a very rapid basis, canceling programs, letting people out.

It's in the news. And so it sort of constantly seems as if there's this kind of, you you know unease in government spending and yet for what right I mean in other words it's not like huge dollar amounts in the grand scheme of the budget so it's it's an interesting way of seeming like you're doing a lot but maybe it's not quite going to get to the bottom line. Well two points Mike one I think the motivation, the primary motivation behind DOGE is not fiscal. It's political.

We're going to shrink the bloated federal government. And they're taking a meat cleaver approach to it. But I don't think the motivation is deficit reduction because it's just not going to have that big an effect on it. It's going to be offset by things like, you know, the adjustment early this year in the cost of living index for Social Security and things like that. But secondly, you're right. You know, for us to have a deficit this large in good economic times is a really dangerous

sign. And most people think on both sides of the aisle that the fiscal trajectory of the United States isn't sustainable and eventually will lead to a really serious fiscal and financial crisis. So we'll see what the actual tax policy of this administration is as this year plays out. I think it's going to take until very late in the year for the reconciliation bill to pass and for the tax part of that to be clear. But they're not focusing on deficit reduction right now, that's for sure.

Right, and you mentioned earlier that consumers obviously are in this hesitant spot, they're not sure what to make of this sort of policy outlook. I assume, I mean, CEOs and investors seem to be in a similar spot, coming into this period, it was a cliche to say, oh, animal spirits are gonna rage, we're gonna have lots of M&A and a deregulated economy

and IPO's and deals. From your perch, is that still going to be the way it goes? Well, you're right. After the election, we all saw it in markets, equities at least, there was a huge unleashing of animal spirits, the so-called Trump bump. But then when we got to Inauguration Day, this blizzard started. And I understand some of the reasons why they're doing it.

But I think it's causing businesses and consumers, as I said, to pull in their horns a bit and to hesitate. We'll see what the year bodes, how the year bodes for M&A and overall transaction flow. A lot of the indices we look at, like backlogs and conflict checks and engagement letters are suggesting a pretty good year. But right now,

I think there's a level of hesitation in the business community and among investors, as you say, which is analogous to how consumers are feeling. It's like there's so much noise that people hesitate. Yeah, until further notice, that does seem the spot we're in. Roger, great to talk to uh... people people hesitate for until further notice that does seem uh... the spot where in our roger great start to thank you right thank you michael the best all right up next three four teams warren pies is fighting some potential economic weakness ahead he'll explain why

after this break closing bell stock staging a rebound after four straight negative weeks, but the S&P 500 is still roughly 7% off its record high. And our next guest says the well shock from the recent sell-off could potentially cause a big drag on economic growth. Let's bring in Warren Pies of 314 Research.

Warren, great to have you on. You know, you got ahead of the so-called growth scare. You thought we were gonna get something like that, undercutting market averages. That did happen. Give me your assessment of the correction and I guess what you see as a potential impact here in terms of the portfolio effect.

Yeah, thank you for having me. I think that that's the number one question we're fielding from clients right now. And it's an obvious one is, you know, we've had a 10% correction. This is a much more, it's not like an atypical event, but it's much less common than these 5% pullbacks we've been suffering through over the last couple of years. And so the big question is, is this the bottom? Should we be de-risking down here or should we be buying the dip? And to us, when you zoom out and you look at history, there's been 52 of these

things of these corrections. And the major determining factor on whether we go lower from here Significantly lower is whether the economy is going to hit a recession in the next six or twelve months So that's where we focus a lot, you know in our basic indicators just to be clear where you don't see a recession You know, the deficit is still pretty large. We've seen private credit ticking up the you know the deficit still pretty large we've seen private credit ticking up. The credit spreads have been really well behaved in this 10% decline which is

basically what you see if we're not hitting a recession during the correction. And so- for the most part and we don't see early cycle you know job losses we expect so for the most part all those things are in place but the thing you alluded to

that worries us but we always wonder what could be different this cycle. It's this- we've had wealth effects such a positive impact on the thing you eluded to that worries us but we always wonder what could be different this cycle. It's this- we've had wealth effects such a positive impact on the economy you know the- the upper strata of consumers have carried this economy. That's on

the back of asset price inflation. And now this 10% pullback when you think about it in. With households so overweight. Equities has resulted in a 12% of the equivalent 12% of equivalent of 12% of GDP wealth shock to household net worth.

And so the 10% corrections are pretty common, but these wealth shocks are pretty rare. It's only the 13th one of this magnitude we've seen. In half of these cases, the economy does end up in recession. So if you're looking for something to be worried about, this is where we're really digging in right now. It's interesting because if you just look

at the aggregate value of equities and therefore, you know, somebody owns all the stocks, so that's, you know, that's where the wealth effect is coming from. We're back to like last summer's levels, right, in absolute terms. You think that that kind of round trip back to where we were six or eight months ago.

Is enough either psychologically or even. By the consumer balance sheet to change spending behavior a lot. I think- it's so the short answer is not enough to put a center recession you know that we're not yet- the other factor when

you think of these wealth stocks just to be totally transparent on the data is. Because how stocks have become a larger larger, increasingly larger share of household net worth over these years, these things have become a little more common. My stats went all the way back to 1950, but we saw one of these in 2022 without recession. We saw one of these in 2018 without recession. So it's important to flag that.

I think the duration of how long we stay down here and how quickly we recover from these lows in the volatility, that's going to be really determine how much retrenching we get from the consumer. But we're in a different place in the cycle and I do think that some of the lower strata is already in a bit of a recession. And so if you get this high income consumer pulling back, it could be really bad for the economy. So yeah, we're watching it, but not there yet. And just in terms of what your work and what your gut and everything says about where we are in this correction process, I know you were also anticipating potentially come April,

tax payments having to be made after we had big upside in equities last year, and that could be another drag. Does that just mean we're gonna stay choppy and keep testing these lows? Yeah, I think that number one, you have to be really clear with your clients and with yourself.

So we have a 10% pullback. I think you need to start having an offensive mindset given the fact we don't see a recession at this point in time. Offensive mindset means that if you're underweight, get to benchmark weight. But on the other hand, we're not ready to go overweight equities again.

We came into the year overweight equities, like you said, we downgraded in early February and we're happy sitting here at benchmark weight after this 10% correction. I do think that so far the lows are in for the next two weeks in the month of March, but I think the month of April is going to be, potentially we revisit and break through the lows we saw in March. So if you wanna see, if you wanna get overweight equities, to me, I think you wait till April, wait till we're through this liquidity drain that we see

and wait for a fat pitch on the sentiment indicators and some of the other things that we watch. So that would be my advice for April. All right. Now we appreciate it, Warren. Thanks very much. Talk to you again soon. Thanks for having me.

All right, now take a look at shares of Capital One and Discover Financial, both stocks in the red, though they are off the lows of the session at this point. I see Capital One down 4% and Change, Discover down 7.5%. A publication called the Capital Forum is reporting the merger between Capital One and Discover, which is pending, is being studied by staff

at the Department of Justice for being anti-competitive in the subprime market. And these are two stocks that just flew on the election result in November on the idea that the Trump administration would likely not contest the deal. We have no further confirmation whether it is or not at this point.

All right, up next, we are tracking some of the other big movers as we head into the close. Christina is back with those. Well, we have the chip stock that's on track for its best four day streak since 1987. A new CEO, a bold turnaround plan, and why Wall Street is suddenly paying attention. The story behind today's surprisingly,

or surprising, I should say, rally. That's next. Coming up on 16 minutes till the closing bell S&P 500 up just about 1% Let's get back to Christina for a closer look at why shares of Intel are soaring today, Christina. Well Mike There's a lot riding on one man. That would be Litbu Tan, Intel's new CEO as of March 18th Reuters reports today that Tan's ambitious moves are Resonating with investors and that's's helping share a surge about 7%, putting Intel on track for its best four day streak

since 1987. So what's Intent's turnaround plan? Well, he plans to slash middle management, transform manufacturing by, quote, aggressively wooing new customers. And this is pretty much dispelling rumors of foundry spin-offs. He's also completely revamping Intel's AI strategy.

The CEO also aims to match NVIDIA with its annual AI chip releases, though a truly competitive architecture probably won't emerge until at least 2027. Nonetheless, it is a positive. Mizuho remains cautious, though, in the near term upside in saying it probably won't go beyond the higher 20s. You can see shares at 2566 right now until more details of Tan's plan emerge.

Execution is going to take time regardless of strategy, but with Intel, unfortunately, I don't want to say widely unloved and under owned, but it is true. Even modest positive news is driving outsize gains right now, Mike. Yeah, for sure. And they were trading those shares below book value not too long ago, which is a rare thing It is true. Even modest positive news is driving outsize gains right now, Mike. Yeah, for sure. And they were trading those stairs below book value not too long ago, which is a rare thing for Intel historically. Christina, thank you very much. Still ahead, Robinhood popping today as it unveils a new in-app offering the details and whether this can help the stock recover from this month's earlier losses. We'll ask that. Closing bell will be right back.

We are now in the closing bell market zone. Robinhood shares rallying today. Kate Rooney on what's behind that move. Plus Julia Borsten on a Netflix upgrade and Phil LeBeau on Mizuho cutting its Tesla price target. Kate, start with Robinhood and what they have here is this new feature. Yeah, Mike, so Robinhood's gonna be launching

a predictions market hub. that's the news today. It's gonna let customers trade event outcomes, so that could include things like sports, got college basketball and March Madness. Coming up, politics, interest rate moves, for example. It does come after some setbacks and some regulatory scrutiny around this launch. Robinhood did pull its Super Bowl contracts.

After announcing those, following some pushback from the CFTC, and this is another move for Robinhood beyond pull its Super Bowl contracts after announcing those following some pushback from the CFTC. And this is another move for Robinhood beyond stock trading. It highlights some of the popularity of these prediction markets as a major market trend. You've got Interactive Brokers, another firm that has jumped into this space. Critics have kind of likened it to gambling, but Vlad Teta, the CEO of Robinhood, last time we talked to him, pushed back on that. He said prediction markets are the future.

He says they're gonna be going big in that area and they wanna be a leader there. Called it qualitatively different than sports gambling. The news though giving Robinhood a major boost. Stock was up as much as 9%, closer to 8% into the close. A sigh of relief for investors. This stock has seen some major declines in recent weeks. It is still down more than 30% in the past month, Mike.

Yeah, obviously trades has kind of an amplified version of what's going on in the overall stock market and retail trader activity, things like that. I guess, Kate, my question initially is, what's the business model here? I mean, is Robinhood gonna be the market maker? Is that they're gonna earn the spread or is it gonna be to their kind of subscribers?

What's the revenue side of this? Because I know they're not gonna be selling the order flow as they do with stock trading. Yeah, I mean, he described it when we spoke to Vlad Tenevich as more of a liquid market. So you'd think it would be the same as sort of the, how they make money off of transaction volume. That's a good question though.

We need to kind of drill down on exactly what it looks like. Are they sort of the front end? I don't believe that they're making markets on the back end. But the brokerage firms absolutely want a slice of this and do see this as sort of the next wave despite maybe the perception or the headline risk that this is a risky part of the market. It seems like sports gambling to a lot of people, but they've really pushed back on that. Yeah, it's interesting. I mean, obviously they like to tout that they get long-term retirement money,

and now they also feel like it's compatible with gamifying the platform to some degree in this way, Kate. Thank you very much. Julia. Exactly, Mike. Thanks. Thanks a lot. Netflix on a pretty dramatic price target raise today.

That's right. Netflix shares are up about 4.5% today. On a Muffin-Athensson upgrade to buy in a $1,100 price target, the firm's saying that its engagement will allow the company to better monetize and unlock greater profits in years ahead. Now outlining three growth opportunities for Netflix. First, Netflix's core subscription business,

Muffin-Athensen, saying it's under earning relative to the engagement it drives, so it still has pricing power going forward. Second, advertising. The note projecting that the company will generate over $6 billion in ad revenue by 2027 and almost 10 billion by 2030. And third, projecting margin expansion will grow

by at least 200 basis points going forward reaching 40 percent by 2030 with room to grow from there. Now this, Mav Nathanson may be a little late to the party with this upgrade given that Netflix shares have gained about 59 percent in the past year. Back over to you. Yes, and it seems as if, you know if the firm is being a little bit opportunistic given the stock did pull back a bit just recently, Julia. I guess the other big picture question is, yes, they've won the streaming wars, but how fast does it continue to grow from here?

On the ad-supported side, I think in particular, because that's the piece where I think you can have a lot of kind of wide estimates in terms of how big that can come. That's right. A lot of variability here. And Netflix itself has warned that this will not be the year that we really see the ad revenues start to impact overall results. Next year is the year when we'll really see that happen. But we have to point out that having this lower price ad supported tier is really important, not just in that double revenue stream that it brings in, but also the fact that it allows the company to lower prices and have a much broader potential audience. So two benefits there of that ad tier.

Yeah, for sure. Obviously allowing them to widen out the customer base. Julia, thank you. Phil, no relief on an update in the market for Tesla. No, and it's another day and it's another analyst or a firm that is cutting its outlook for Tesla, specifically when it comes to deliveries and earnings expectations. So, Mizuho has cut its price target for Tesla going down to 430, was previously at 515, also lowering its estimates for this quarter,

all of 25 and 26 when it comes to earnings. And the headwinds are the ones we've talked about for some time, Mike. China, we know what's happening with the EV business there, and geopolitics. And the implications as far as Mizuho sees it when it comes to deliveries is lower than expected deliveries for 2025.

They've certainly lowered their estimate, now bringing it down to 1.8 million for this year. Most analysts have been trimming their estimates for this year, by the way, they were at 1.79 million last year in terms of deliveries. Brand perception is the other thing, as you take a look at shares of Tesla, Mazzuho said, clearly the brand perception has deteriorated.

The big question, Mike, is we'll find out in early April just how much that brand perception eroding has hurt their deliveries, not only around the world, but I'm really interested in seeing what the deliveries look like here in the United States. Oh, for sure, there's no doubt about it. And obviously the question of whether it would behoove Elon Musk to spend more time directly talking about the Tesla story and working on it day to day.

It seems like what he usually has to do is come in and sort of emphasize the long-term vision and then investors maybe will start to focus on that again. Right. And remember, we've talked about this for some time. Most of the people who are bullish on Tesla are bullish because of their belief in robotics, autonomous vehicle technology, robotaxis. I've yet to come across somebody who says, yeah, I think that the deliveries are going to be holding up pretty well.

I think people realize that there's a split there in terms of the fundamentals versus the possibilities. Yep. Has been for a while. Still a $770 billion market cap. Phil, thank you very much. As we head into the close, 30 seconds left. versus the possibilities. Yep, has been for a while. Still a $770 billion market cap. Phil, thank you very much. As we head into the close, 30 seconds left.

The S&P 500 up two thirds of 1%. So extending Friday's game, but definitely well off the boil. We did not nearly recoup the losses of all of last week, which were more than 1% higher from here. You do have the majority of stocks though solidly higher. It's been a very strong rest day. Eighty percent of all volume in the near stock exchange

could be upside for the second straight day. Could have some technical implications on the positive side. That does it for Closing Bell.