Closing Bell - Closing Bell: What Should You Do with Your Money? 3/8/23

Episode Date: March 8, 2023

Investors are weighing what to do post-Powell and pre-jobs report. Cantor’s Eric Johnston and Cerity’s Jim Lebenthal duke it out in a big bull-bear debate. Plus, Wedbush’s star analyst Dan Ives says there’s a 25% upside for Apple. He makes his case. And, - on this International Women’s Day – Shannon Saccocia of SVB Private and Jenny Harrington of Gilman Hill Asset Management break down how they are trading the market turbulence. 

Welcome to Closing Bell. I'm Scott Wapner, live from Post 9 New York Stock Exchange. This make or break hour begins with stocks still on the defensive and still reacting to the Fed chair's hawkish commentary. Higher, faster, longer, three words that continue to reverberate through markets. Nowhere is that more clear than in treasuries. Rates continuing their climb. Here's your scorecard with 60 minutes to go in regulation. And as you can see, stocks are still lower again as a more hawkish Jerome Powell over the past couple of days, sending yields up the two year, running over 5%. There it is, 506 as we watch the curve. And that brings us to our talk of the tape, the Post Powell

Pre-Jobs Playbook. And what should you do with your money now? Let's have a debate about it. Let's bring in two people on very different sides of that debate. CNBC contributor and market bull Jim Laventhal of Zarity Partners and Cantor's Eric Johnston, who's been doubling down on his call that stocks are about to head much lower. Both are with me here at Post 9. All right. So we're going to have a spirited debate about this. And Jimmy, you're the bull. You're going to get the first crack, OK? Stocks obviously didn't like what the Fed chair had to say over the last couple of days. Bond yields rose. Why are you still bullish in the face of that and all you heard? There's a conflict going on here, and I think we all see it. Right. We see what the Fed's doing.

Let me be clear about something. I'm not a flat earther. OK, I'm not denying where the yield curve inversion is. I'm not denying what Chairman Powell said. But the flip side of this and the conflict is that this economy is doing really quite strongly. Whether you look at Atlanta Fed GDP now or you look at jobs, and that really for me is the crux of this. People are employed. If they're employed, they're consuming. Consumption is a very large part of this economy. China is reopening. Europe hasn't done as badly as people feared.

But this is the conflict, right? Can the Fed actually just crush this economy? Do they need to crush the economy? By the way, I actually think inflation is coming down more than people suspect. We had three good inflation months in a row, and then January kind of messed things up. We've got to see, starting on Friday and next week,

with the jobs report, average hourly earnings, CPI, PPI, where we are really going. But here's the thing. There's a tie going on here, right? We've got the Fed really kind of punching the economy in the face, but you've got the economy really hanging in there. End of the day, I'm putting my money on the economy. It's that simple.

The economy wants to grow. People want to spend when they're employed. I feel comfortable with where the employment numbers are. All right, so Eric, I mean, you've been here on numerous occasions, certainly lately, doubling down on your conviction that this market's in trouble, that it's on borrowed time, and stocks are going down and going down a lot. What do you make of what he said? So, you know, I've never seen the risk in this market be so asymmetric to the downside. And when I say that, you've had the two-year yield go from zero to now it's above 5%. You've had the Fed funds rate go from zero

to what's going to be likely 5.5% in 13 months. And you have a quantitative tightening going on simultaneous with that. If everything goes perfectly, and what Jim is saying, all goes just perfectly, somehow, even with that going on, the economy continues to grow as it is. Well, right now we're trading at 18 times those earnings, which is outside of bubbles, a historically high multiple. And every other indicator, in terms of leading indicators, would suggest that the high likelihood is that the Fed is going to negatively impact this economy and that when you have rates go from zero to five percent, we all know there's a lag effect,

right? We all know that. So looking at a payroll number today or the consumer today, the consumer was strong before all other prior recessions. The leading indicators all suggest significant downside. And if that doesn't happen by some miracle, then stocks are still at current earnings overvalued. That's the big pushback against you, Jim, is that what is today is not going to be tomorrow. We've discussed it a million times. We have discussed it a million times. The idea of what the Fed chair put forth a day ago and didn't back off from it really today, this higher, faster, longer idea. Are you ignoring that?

No, I'm not going to use the flat earther comment again. I'm very aware of what he said. But I also think that this is a Fed that desperately wants to see Friday's average hourly earnings numbers and next week's CPI, PPI. And luckily, they get all three of that before the next meeting. You know, I'm thinking about what you're saying. Look, there's validity to what you're saying. There's a conflict here. I mean, we're not speaking falsely, either one of us.

No, but your mountain is higher to climb than Eric's. Let me tell you what's a good climbing rope that I have that's aiding me here is the strength of the banking sector. OK, and when you just said we've talked about this a million times, you, what's going through my head is when Jamie Dimon said the hurricane comment, and we, when Elon Musk said the super bad feeling about the economy comment, that was literally nine months ago. We've been going along. And one of the things that just hasn't cracked is the banking system. Now this matters a lot because when you get a real face ripping bear market, you know, what happens is somebody like Citigroup or JP Morgan has some huge trading loss on European natural gas, or we find out they were invested in some crypto hedge fund that blows a hole in their balance sheet and they can't lend anymore. Now, I'm sure you're

going to say, Eric, I shouldn't say it, sure, but I'm sure you're going to say, what about that tightening that's going on at the banks? It's going on. But that's not a gut-wrenching tightening. That's just a normal, at this stage of the economic cycle, tightening. You've got a very healthy banking system. And until that shows some sign of, like, not just a crack, I mean a major schism, a fracture, I just don't see how things get as bad as we're all fearing. See, part of your point, Eric, too, is that what Jim sees as a strength, you see as a liability. I go to the Beige Book today, for example.

Inflationary pressures remain, quote, widespread. Economic activity rose slightly in early 2023. Jim would say, see, I'm telling you, the economy is strong enough to withstand whatever the Fed is doing. We're either going to get a soft or no landing, where you would say, see, that just means they're going to do what I say. They're going to do more. They're going to push the economy over the edge because they have to. Yeah. And that's the problem right now with being long equities. It's sort of a, you know, heads you win, tails I lose type of situation where if the economy is strong, then they're going to raise rates more, which is what's going on now. And that eventually will make the ultimate fall in the economy even larger as they start to move rates, move rates higher. You know, one of the things around recessions is that

there were really, there were no recessions from 2009 up until COVID because we had all this stimulus coming from fiscal, monetary to support the economy. Well, now we're in a very different situation. We're back to where it was before. Well, because of inflation, right, because the Fed balance sheet is already as large as it is, we don't have that ability, right, to have that buffer on the downside.

So I think we're going to be going much more towards normal economic cycles going forward, which even means there's more downside risk. But it also means that people are less able to forecast them or believe they're going to happen because they haven't seen one for such a long time, ex-COVID. Now, let me ask you this, Jim, because if we were in a different regime where the Fed was pumping liquidity into the market, you would be making the argument, I bet, don't fight the Fed. Look at what they're doing. They're putting all of this money into the system. So how can't the economy do great and the stock market follow? Now they're doing the exact opposite, but you keep arguing what you would argue if it was the other way around. And how do you square that? I actually love what Eric just said about getting back to normal economic cycles. I hated this

intensive care unit status that the economy was in for 15 years with zero interest rate policy. It's abnormal. It's not good. Here's what I believe is going to save us as the Fed normalizes, which, darn it, it should. OK, but what's also going on is the after effect of the pandemic where you've got hundreds of billions of dollars of cash being spent on supply chain, onshoring and infrastructure. And when I say hundreds of billions of dollars, I'm talking about the list price for those semiconductor plants and the EV battery plants and all that sort of stuff. I'm not talking about the knock on multiplier effect that we often talk about in the housing market, but will also be felt with Union Pacific shipping aggregates to the building sites and the proverbial lunch van guy

who's feeding the workers there. I think that's a powerful force that frankly explains why the housing market has been on its back for a year. And yet this economy is going strong. I mean, there are explanations that make sense to me. Eric, what's the counter? Yeah, so I think a number of things. I think when you look at the unemployment rate right now at 3.4%, that's not going to go any lower, right?

It's just by definition, we're at full employment, right? And so we've looked at the data when the unemployment rate bottoms and goes higher. And what happens is as the unemployment rate is going higher, GDP falls, which is a natural thing that you would expect. And also stock performance is very poor, is that as the unemployment rate is going up, we looked at the annualized returns when that happens, and it's around 3.5% going back to 1960, which is below where the current two-year yield is, well below. And so what it tells you is that returns going forward are going to be much lower

because we're starting from the top of the cycle. And that makes it very, very difficult when you're at the top of the cycle and you have the Fed that is against you. That becomes very, very difficult when you're at the top of the cycle and you have the Fed that is against you. That becomes very, very problematic. This dramatically inverted yield curve doesn't phase you at all? Here's my question. I mean, it's a rhetorical question. Explain to me how it causes a recession.

I understand they're correlated. I get that. I understand the data. We don't have to do that. But that correlation doesn't tell me the causal mechanism by which that yield curve inversion causes a recession. Well, it doesn't necessarily have to cause rather than predict. Correct. Okay. It's like right now. I mean, right now, I'm suggesting that it causes a recession. Maybe I'm hearing what I want to hear, but obviously that comment gets made to me often. But you know better than that. You know what people are saying about how dramatically inverted the yield curve is.

Now, it doesn't mean you get a recession every time, but you never get a recession without a yield curve inversion, and you have the most inverted curve that you've had in for as long as people can remember? Right now, you have the 10-year yield, you know, 150 basis points below where the Fed fund's rate is likely to be going. What that's telling you is the Fed is going to get to 5.5, and then at some point, they're going to have to cut dramatically. 5.5?

Well, the other problem Jim has is, you know, as some would say, Jim, and I'll let you push back on this if you want to, BlackRock's Rick Reeder. I mean, the 6% club on the terminal rate seems to be growing by the day, if not the hour. Reeder at BlackRock, Wolf for Search, Greg Branch was here on Closing Bell yesterday, said 6 to 6.5. Seems like the risk is to the upside, not the downside at this point. Listen, I'll grant you. Let me be clear. You know, this is not a perfect situation.

The degree of confidence in anyone's output right now, their projection, has to be low. We are really in uncharted territory. How is the labor market hanging out as well as it is? But look, I think the answer to the question is inflation does have to really moderate. It was doing that until we got the January figures. January's numbers showed moderation, but not to the level we want. If I look at a lot of commodity prices, if I look at gasoline futures, if I look at freight costs, if I look at rents, these are moving in the right direction. One of you will say, yeah, but what about wages? And yes, you're right. That is still a problem.

I thought one of us was going to say, yeah, but what about services? Because that's what the Fed cares about most of all. But you don't like to hear about that either. Oh, come on. I am totally dancing with what you're saying. I'm open to what you're saying. I just said there are flaws in the argument. Sure, but everything that presents to you from the bearish side is, yeah, but.

Well, everything that the bulls present to the bears is, yeah, but. So, listen, I think there's reason to have an argument. I think there's reason. I'm not saying Eric's a nut. He's reason. I'm not saying Eric's a nut. He's not. He's not saying I'm a nut. We're disagreeing, but we're not disagreeing on the facts. I think one of the things that Jim said was there's a lot of uncertainty.

And my point is, is that the uncertainty is only to the downside. We're not going to have a situation where the economy surprises to the upside in the face of 6% Fed funds rate or 5% two-year yield. If the question is, can the economy hold on or is it going to get materially worse? That's a terrible risk reward for owning equities. And that's the last environment that you want to be in stocks, especially when you have the alternative of being in a 5% money market fund. Well, that's the other issue, right, Jim, is that what was no alternative has a lot of alternatives now. And we've heard that throughout the day on other programs, too,

whether it's money markets or various parts of treasuries that offer the kind of interest rates and value, if you want to say, that people are flocking to now. A good, normal environment. I mean, this is good. Eric, you made a comment earlier, it's related to this, about the market multiple. Absolutely valid. I don't like the market multiple of 18 times.

That's a reason why I'm underweight technology, which is promoting that quite a bit. You know, we know at the top of the market, 25-odd percent of the market is the top six stocks, and they're inflating it by a good one and a half to two turns. If I look in what I think is going to benefit from the supply chain, onshoring, industrials, materials, financials, energy, I don't have those multiples. And I've got good dividend yields. So I hear you. I agree with you on there is an alternative both within and outside of the stock market. Let me get you to respond to this, Jim, too, from Marco Kalanovic from

yesterday. Quote, we maintain that risk assets are in a bear market and will not bottom until central banks start cutting rates. That's what he said over at J.P. Morgan. You want to take that on? Yeah, I mean, he could be right. I actually think, though, here's a hypothetical. Let's say you get a pretty benign jobs report in terms of inflation.

Let's say you get pretty benign inflation reports next week. I think the market's going to rip on the anticipation that the Fed is close to a pause. Nobody should be hoping for a cut. And I'm not hoping for a cut. It means you're in trouble. It means the economy is in trouble. Yeah, I would say there's been nine recessions since 1960. The bottom in the equity market was after the start of the recession, 100 percent of the time. So if you think there's a recession coming, the lows are still in if the nine times prior hold up. And I think the chances of recession are very meaningful. We've laid out over the last couple of days the fact that you have arguably the 12 or 13 most meaningful trading days of the year occurring in this stretch. Now, you can cross the Powell testimony off that list, but you do have the jobs report. This week is your next sort of hurdle to jump over.

Are both of your outcomes, in a sense, hanging on what happens on Friday? So, no. The short term, look, the Friday and Tuesday report, payrolls and CPI, are extremely binary based on the setup from Powell yesterday. Extremely binary. I frankly, I don't have a view on how Friday and Tuesday is going to play out. But we're going to have a sharp move in equities one way or the other because we're going to know by Tuesday whether they're going 25 or 50. Now, so it impacts the next one week significantly. The impact on my view beyond that is of very little impact.

You know, very little impact. We know we have a strong view around where the end point is in this market and whether it's going to start on Friday or continue on Friday or continue at a later date, I don't know. But Friday and Tuesday are huge, and we will know the answer by Tuesday and what the Fed's going to do. You want to take that on, too? The stock the next few weeks does matter.

I wish it didn't matter as much as it did, and I'm tired of saying that. I've been saying it for 14 months. But, look, if you look at the technicals in the market, you know I'm not much of a chartist. But if I have a pattern to tell you, that means it really matters, okay? We bounced off the 200 day moving average a couple of weeks ago. We've had a series since the October lows of higher highs and higher lows. That's actually great from a technical point of view. You've had the golden cross of the 50 day moving average going across the 200 day moving average. But here's the thing.

If you get lousy, hot inflation numbers next week, it's going to break. The trend's your friend right now. But yeah, if these inflation numbers come in hot, that ain't going to matter. You know, Mark Newton, too, who was on this show yesterday, he thinks rates are topping out and he's bullish, too. I think any further drawdown is actually not going to last more than three or four days. And we're going to bottom out and turn higher. Momentum's good. Nearly 60% of all stocks above their 200-day. That's impressive. This isn't something we run into the hills because of one down day. So we're going to see.

I want to have you both back in the next, you know, few weeks at most. And I want to see where we go, and I want you to continue this debate. I understand. Eric Johnston, Jim Labenthal, I appreciate it very much. Thank you. All right, let's get to our Twitter question of the day. We want to know who is right about this market. Is it Eric Johnston or Jim Labenthal?

You can head to at CNBC Closing Bell on Twitter. You can vote. We share the results a little bit later in the hour. We're just getting started here on Closing Bell, though. Up next, seeing serious upside for Apple. Star analyst Dan Ives back with a fresh call on that stock. We're live from the New York Stock Exchange, and you are watching Closing Bell on CNBC. We're back on Closing Bell, 40 minutes left in the trading day. Let's get a check on some top stocks to watch as we head

closer to the close. Christina Partsinevelos is here with that. Christina. Well, let's start with Dick's Sporting Goods. It's trading at fresh all-time highs today as analysts weigh in on its earnings beat yesterday. 13 firms raised their price target on this stock. The highest comes from Evercore, which now has a $200 price target on this stock. Its high today was about $150. It's at $148. So clearly a lot upside for that $200 mark. And as the dollar has rallied, we're switching gears now on Fed Chair Powell's comments in the past couple of days.

We've seen gold hit its lowest level since late February. Gold, aluminum, nickel, and silver all lower just over the past week. Scott. All right, Christina, thank you. We'll talk to you again in just a little bit. 25% upside for the largest stock in the market. That is our call today from one of the biggest Apple bulls on the street, star Wedbush analyst Dan Ives.

Raises price target today to 190 on signs of rebounding iPhone demand. There you see him, joins us now. What is the evidence, Mr. Ives, of this rebounding iPhone demand? Yeah, I mean, our Asia checks this week, which we finished yesterday, they're showing no cuts to production.

And that's important because what we're really seeing through there is that demand looks strong out of China. I think a significant uptick, especially post-December, and ASPs, we believe, are close to $900. You put that in right now, they're tracking 3% to 5% ahead of where the street is. But you use the word yourself, modest, in your characterization of the uptick that you've seen in demand in China. And I'm wondering, is quote unquote modest uptick, is that enough to make a broad statement about demand overall? That's a great point, Scott. I think most suppliers were viewing that there was going to be actually downticks, that you're going to see potential cuts. And I think the fact that there's actually been upticks, specifically in China, I think that continues to be hearts and lungs of what we're seeing in this upgrade cycle.

That's what really stands out. And when you trajectory that out, you can now have called six, seven million iPhones that beat for the year, despite what we're seeing, this macro uncertainty and the ASPs are key. That's that's really why this continues, in my opinion, to be a rock and Gibraltar tech stock. But see that you you mentioned the macro yourself, which, you know, I wanted to ask you about the danger of making a call like this in what is a still very uncertain macro. And I don't think you'd be prepared to make the statement that Apple's recession-proof, are you? Not at all. And I think we've seen it. I think Cook's talked about it. But I do believe that they have steel armor relative to that install base.

I mean, that's really the golden install base that they have. I think factored into what I believe is the services, as well as what we see with iPhone, in my opinion, I think this is one that's going to have upside the next few quarters, despite what clearly right now is New York City cab drivers bearish on Apple and broader tech going into what's clearly a white-knuckle environment. But, I mean, the services business we already know is slowing. So, is a modest uptick in demand enough to offset any of those concerns, enough that you would want to bump your price target up? Yeah, and the services business, which we think is worth anywhere between $1.2 to $1.3 trillion. You now have about 120 million new iPhones over the

last 15 to 18 months. Services attach rates, I think it's going to be strong there. We're seeing an uptick on App Store, as well as some of the things that are happening internationally. I put it all together right now, relative to where we saw this name even a month ago, I think we're seeing demand tick off. And I think that's important. What really goes into the drumroll iPhone 15 anniversary cycle, which will hit in September. Is there any regulatory risk that you see at all? DOJ said to be, you know, escalating their scrutiny of the third party app issue. Yeah, I think that continues to be headline risk. I mean, obviously the Epic trial, I think that really gave investors a lot of agita. But if I look at it right now, I think Barksworth and Byte, when it comes to Apple from an antitrust perspective, we spend a lot of time in the beltway.

I think right now the lack of consensus is actually a positive. And that App Store, that's one of the key ingredients in their recipe for success in terms of that attach rates. And I think that's why right now this is really Cook navigating the storm. We'll leave it there. Dan Ives, thanks so much. We'll talk to you soon. Thanks for having me. That's Wedbush's Dan Ives joining us here on Closing Bell. Up next, trading another down day. Stocks heading lower as we make our way towards the close today. Dow's at about 184. Halftime committee member Shannon Sekosha, Jenny Harrington joining me next right here post nine with how best to trade this turbulence.

We're back after this. We're back on Closing Bell. Stocks trading lower, extending yesterday's losses after Fed chair Jay Powell signaled rates would go and stay higher for longer. Joining me post nine, Shannon Sikosha of SVB Private and Jenny Harrington of Gilman Hill Asset Management. Both are CNBC contributors. And it's nice to see you both on International Women's Day. Glad to have you both together. I mean, I don't know if you heard the debate between Labenthal and Johnston, but Jenny, who's right? Should you be more bullish or more bearish right now? You know, this goes back to the question you asked me two or three weeks ago, which I've kind of been obsessed with, which is, do you fight the Fed or do you fight the tape? And this is where I'm going to give you the lame answer, which is they're both kind of right. Because you can't

really fight the tape, right? We know that over the long run, the market goes up 8% to 10%, and most of us are long-term investors. But we also know that the Fed's going to give us opportunities. So what I'm doing right now is I'm sitting a lot, I've got about 10% in cash. I sold three stocks that reached full valuations, and I'm being patient on what I'm buying. So that's where I'm not fighting the Fed, where I'm kind of negative. But where I'm kind of bullish is understanding that over the long run, the market goes up. And if you take any kind of long term perspective you're most likely going to have a positive return. So you know lame answer but I think they both have elements of correctness. We think. Yeah I mean I think this talks about kind of sort of timing in terms of

you know you talked about this in the show last week. We are looking at this period of the next 10 13 14 days where we're going to get a lot of data points and to me some of those data points are the majority of those data points, I think could be market moving to the negative. And so I think one of the things coming out of January, all of us said we're not going to annualize at the same pace. We're not going to annualize at the same return. But to me, if you're sitting here waiting for your perfect entry point,

well, you probably should already be in the market because nobody can time that. But if you're looking to incrementally add from, say, treasuries that are giving you a nice return, you probably are going to have several opportunities over the next couple of months because the inflation story is not on the track or trend that it needs to be for a significant rebound in the markets over the next six to eight weeks. You're super long-term outlook, Jenny. You know, I get it, but I'm trying to speak as the broader investor, not me personally. But I, as the investor, am not going to put money broadly in the market today because you tell me, well, 80% of the time over the long term, it goes up. If I think that we're about to have an Eric Johnston predicted upset in stocks because the economy is going to go down the tubes.

You understand what I'm saying? 100 percent. But let's use my client base as a representation. So my client base tends to be kind of between 50 and 90 years old. And you know what? Most of them have been invested for 10, 20, 30, 40 years. They're certainly not getting out now because they know that their likelihood of being right and timing it correctly and getting out now and then getting back in later.

No, no, they're not getting out now, but they're not calling you up, I bet, and saying, Jenny, this is a great opportunity to put money to work in the market. I doubt that. But what percent of it out there is just new money coming in, right? That's tiny versus what's already invested. So there are some people who are getting their bonuses still this year and we're kind of playing around with it. And I'm saying, OK, send the money in and, you know, we'll pick off positions as they become attractive. Now, maybe they're saying, you know, look, to Shannon's point, send the bonus in and let's put it in short, you know, shorter dated treasuries or put it in money markets, which are giving you the kind of opportunities that you literally haven't had in decades. Well, academic research shows that this dollar cost averaging idea, after two years, it really doesn't make a difference,

as long as what you want it to be is invested in the market, to Jim's point earlier that he made. But in this period, there's an opportunity to be patient, look for these opportunities to add to areas you think are interesting. And that's not just in certain sectors, but it's in equities at large. And to me, I look at the next couple of weeks. And again, you know, if you're sitting and you're getting paid there, you can go more slowly than perhaps we would have done in the past, just based on the fact that there is this alternative. You gave Jenny, our producers on Halftime today, a short list of stocks that you are looking at. UPS, Stanley Black & Decker, Ford, Crown Castle.

Why? Why are those the ones on your list? Well, let me just riff off of what Shannon said and bring you into that. So what Shannon said, right now we have an opportunity to be patient. We have not had an opportunity to be patient in, what, like a decade? The market's just gone up and up in our face. And if you sit in cash, you're actually losing money. But now you can sit in cash.

So why those are on our short list is all of these are for our dividend income strategy. They all have very nice yields. They're really well priced. So they're not teetering on a valuation cliff. They're not trading at 21 or 30 times. They're trading at 10 times and 7 times earnings. And that yield is there. But the reason I haven't bought them yet is because I think, you know what, there is a lot of systematic risk in all of those stocks. They're big names. And so

if the market comes back 5% or 10%, I'm probably going to get in cheaper. But they're all just really excellent companies that if the economy does stay decent, right, if we kick a recession into 2025, their earnings are going to truck right along. And it's so interesting. UPS just last night reiterated their guidance. So on their last earnings call, they jacked up their dividend. Last night, they reiterate their guidance. You do the work on it. You're like, you know what? That's a great company. And I might buy it 50% cheaper than where it was a year ago with a nearly 4% yield. Like, that's great. What looks good to you in the market right now? Yeah, I mean, I know we talk about tech a lot, and so I'm not going to spend a lot of time there. It doesn't matter if it's the right place to talk about it. Diversifying your exposure there,

looking at valuation opportunities within technology, healthcare. I think, Scott, that the opportunity to invest in healthcare has a demographic tailwind, a longer-term secular tailwind than most other industries that we have an opportunity to do. And so if you look at all of the innovation that's happening in life sciences, for instance, we're on the cusp of this. Remember like the Lipitor, the cholesterol drugs? Remember that wave of drugs where everybody was buying pharma stocks? We're at the precipice of a new wave of innovation in life sciences and in pharma. And I think that there are huge opportunities to be investing there. All right. Thank you for sticking around. Shannon Sikosha. Jenny, you have a little

more work to do. We'll see you get in the market zone. All right. That's Jenny Harrington, too. Up next, we're tracking the biggest movers as we head into the close. Christina Partsenevelos is back with that. Christina. Do you like Jack Daniels? Yes, you. Well, clearly not enough to help with the parent company's earnings miss. I'll have all of that and much more after this break. Go get that Jack Daniels. 20 minutes till the close. Back to Christina Partsenevelos now for a look at the key stocks to watch over that home stretch. Christina. Well, energy stocks right now are getting slammed this week as oil and natural gas prices continue their slide. The worst performers today are names like Valero, EQT, Cotera, and Phillips 66 that you can see on your screen. Phillips, for example, or Cotera, I should say, is down almost 3%.

Every stock in the S&P energy sector is heading for weekly declines except Occidental, which actually right now today is up 1.4%. And now for that alcohol conversation. Jack Daniels' parent company, Brown Foreman, is one of the worst performers on the S&P 500 today after reporting a sizable earnings miss. That's thanks to higher advertising, general and administration expenses. Though the bourbon maker did project full-year net sales growth higher than its previous guidance. So I guess there are Jack Daniels drinkers out there. Christina, thank you. Last chance to weigh in on our Twitter question. We asked who is right about the market, Eric Johnston or Jim Labenthal? There they are on the big wall. Now go vote

at CNBC Closing Bell on Twitter. The results right after this break. And a programming note. Tune in for the premiere of CNBC's newest show, Last Call. It's tonight, 7 o'clock Eastern, hosted by Brian Sullivan. You don't want to miss that. We are right back on Closing Bell after this. Now let's get the results of our Twitter question. We asked who's right about the market, Eric Johnston or Jim Labenthal?

The majority of you, near 57%, saying Eric Johnston. Up next is the bottom end for the chips. Top analyst Stacey Raskin is standing by with his take and the key names he is betting on in that sector as one increases its dividend today. That and much more when we take you inside the Market Zone. We are 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, Stacey Raskin on the rally in chip stocks. Jenny Harrington is back on Warren Buffett's big bet on Occidental Petroleum. We

begin with you, Mike. A nice little bounce as we move towards a close, right? S&P goes positive. Dow may very well try and do the same thing. Yes. You know, certainly oscillating in an hour range. I think you have to grant the fact that the market is swimming against a somewhat stronger current than it was a couple of weeks ago. But it's still afloat. I mean, we're still up for the month.

You have to grant that also small caps have lagged this week. And some of the, you know, risk appetite indicators that we're sort of leaning on to say that the market, quote, wants to go higher or at least not down, they've possibly softened up a little bit. But you're going to talk about semis. They're a strong point. And the defensive areas of the market have not really distinguished themselves to say that we have an economic problem. It's much more about a what do you pay for stocks and when are yields going to quit type of problem. I feel like our Twitter poll has really tended to capture the pulse of the market for that particular moment. And I think today is very well representative of that.

So it was 57 percent to 43 percent for Eric Johnston's more bearish view. All right. That's a strong majority, but not a runaway. Not at all. The bulls are still, you know, hanging on to some degree of hope. And maybe it's backed by some evidence. I go back to Mark Newton, you know, yesterday with me right on this program. Momentum's good. Nearly 60% of all stocks above their 200 day. That's impressive. Don't run to the hills because of one down day in the market. Well, that's true. I mean, now, look, the percentage above the 200-day moving average has been sliding. So you have had a little bit of a giveback in this digestion period. But on sentiment

and on positioning, I don't think that's one of the market's problems. We had a 5%-ish, 5%, 6% pullback from the high February 2nd. And immediately, all the surveys turned pretty bearish. And you actually saw things like hedge fund exposures come in pretty hard. So people had been keeping the market on a short leash when it was running higher. And now they're kind of not really willing to grant the benefit of the doubt. I don't think it's a clear edge. Clearly, the market is fixated on the jobs number on Friday for good reason. Oh, yeah.

But what Powell said today was at least not an escalation. We wanted a data-dependent Fed. We haven't. Leaslin even said there was a little bit of dovish nuance. There was. You could certainly take that from what Mr. Powell said. All right. Stacey Raskin of Bernstein, one of the top chip analysts on the street.

Qualcomm, let's start there. Bumped the dividend today. What's your reaction? I'll be honest. I didn't have much of a reaction. I don't think it was hugely unexpected. I had any sense in my model. It's kind of in line with the typical magnitude of the dividend increase that we've seen out of them in prior years. So it wasn't unusual. You're probably comparing it with like Intel, who obviously just cut their dividend. I mean, Intel is kind of in a special case all by themselves.

They don't have any cash flow. They don't really have the money to afford to pay it. Qualcomm clearly does. Somehow all roads always lead back to Intel with us, doesn't it, Stace? I don't know what that says about your view of how dire things may be there. But what about the space in general? Mike Santoli, to my left here, was just mentioning the strength in chips. Is it believable? Is the worst behind that sector? Yeah, well, so semiconductor investors tend to

like to buy the stocks after numbers have been cut. And the best time, if you can time it perfectly, is usually after numbers come down just before they hit bottom. And if you look at where the estimates have been, forward estimates peaked in June. They've come down 30% since then, broadly for the whole sector. It's actually the largest negative earnings revisions we've had probably since the financial crisis. It's been pretty big. I think right now people are playing the sector broadly for the second half recovery and China reopening. And it's March, so you can do that now. We'll see what happens as we get through the year at some point. We'll have to actually see it in the results. But for now, you can do that now. We'll see what happens as we get through the year. At some point, we'll have to actually see the results.

But for now, you can play that. I think there's also a broader trend, though. People are getting very excited about some of these more secular trends, especially artificial intelligence, generative AI, and chat GPT. And I saw the little leader down there that said the top S&P 500 stocks are Rista, AMD, and NVIDIA. Presumably, those are all going to be AI kind of plays. The thing is, when you sit down and you start to actually size what this could mean for some of those kinds of stocks, particularly a stock like NVIDIA, that opportunity could be very big. And it may not be the next six months or 12 months, but if you're starting to think through a sector that is bottomed and looking for those longer-term, broader secular plays that could really drive

upside the expectations and multiples and ideally the stocks. I think those are some of the trends and drivers that are capturing people's attention. Now, it's one reason some of these stocks are doing very well. Don't answer this next question based on your sort of big world, big picture, longer-term perspective view, but answer it for me based on where both stocks are today. That leads me to NVIDIA versus Qualcomm. I know two stocks that you like, but which is better today? And it's kind of a loaded question, right? Because look at what NVIDIA has done year to date. Is it attractive today?

Yeah, you bet. So it depends on what you're looking for. NVIDIA clearly has done very well year-to-date. It's up 60% plus year-to-date. I think that one can still work. I actually really do like it. I like it right now, and I like it for the long term. Qualcomm's a little different. Qualcomm has done an okay year-to-date, but it's probably underperformed space. It's a smartphone. It's perceived as a smartphone play. And anything touching smartphones, I said this before on air, but anything touching smartphones has been kind of death. But if you're looking for at least a back half recovery play, tactically, I actually think Qualcomm fits the bill.

I mean, handsets did not benefit from COVID. They were just lousy the whole time. So at least I don't have a ton of demand to pull forward to work off like I have in PCs. I think a lot of the weakness was due to China. And so if China is going to reopen like that, that's actually a positive in the back half. Qualcomm kind of put the bottom and also they guided March quarter flat for handsets, usually be down pretty significantly seasonally. So that kind of sort of tells you the bottom, at least, and we can argue when it starts to pick up,

but it probably doesn't get much worse. They guided, you know, 215 in earnings, annualized it, call it an $8-plus kind of trough number. It's like 14 times on that. And, you know, you're kind of looking for, there's even a broader, like, non-handset story there that is really, really good. The stock's very cheap while you're waiting for it.

So on those kinds of dynamics, especially if you're playing for a back-half recovery, I like Qualcomm. If you're playing a broader secular trend, I like NVIDIA. All right. Great last words. Stacey, thank you. As always, Jenny Harrington back with us to the other big story of the day, Buffett buying even more Occidental. And something that's been confounding to many, certainly from positioning, is the lack of performance from energy stocks this year. Jenny? Well, I think the lack of performance part is, look, they had an enormous run in 2021 and 2022. And as we all know, when things go wild, they just need time to consolidate. But I think the way to look at Oxy or the holdings that I have, which are Pioneer and

Devon, is you need to take a big global approach. And you can take a U.S.-centric approach and say, like, hey, we're not using as much gasoline. In fact, gasoline consumption peaked in 2019. But if you step back and look globally, you see that we're now consuming 100 million barrels of oil a day, and that's consistently growing at just shy of 1 percent. So as we've got EVs and work from home and all of that decreasing gasoline consumption, there's jet, there's more flying throughout the world, more jet fuel consumption. Developing economies are using way more gasoline.

And that all trickles in to prop the price of oil up. So you look at an Oxy and it's pretty cool. They've got 85% of their revenues come domestically. They're a little bit more diversified and have some exposure to the Middle East. They've got a lot in the Permian. And you've got a stock that's trading at like a really inexpensive valuation with decent growth ahead. If you want to play it from

the dividend yield like I do, then you play it a little more U.S.-centric and look at Pioneer and Devon. But the reality is, is all those stories are kind of the same, saying there is for at least the next 10 years kind of endless demand for fossil fuel consumption. You know, Mike, you still have people saying energy is the place to be. When you ask them what they like. I like energy. They're not believers, many or not, in this counter trend move we've had in tech and the consumer and some of these other places. Right. And look, there is still a little more of an earnings base, a little more earnings momentum in some parts of energy than you're going to find elsewhere. At least it seems like it's more stable. So I understand that. It also should be in the sort of value bucket that should do reasonably well when rates are higher

and other types of cyclicals have been performing. So I understand it. You're metabolizing, what was it, a 60% move last year? I mean, it's kind of wild how far up it was. And while it looks like a diversion with the crude price, right, if you look over two years, it looks like energy stocks have held up too well relative to where the commodity has been. Over a longer period of time, it's not really the case. They're more or less in line over five years. So I don't think that's one of those things that you would throw at the sector. But it is, you know, it is interesting that you can either do it as a proxy of the income play, or it's a China's coming back,

and it's a long-term kind of bull market in real assets, which is another, I think it's another line of thinking around it. There's your sound effect. Two-minute warning is in full effect. Jenny Harrington. Thank you for that. So if you don't want to look at them from a PE perspective, because there is kind of limited earnings growth ahead, and they're all trading at multiples of under seven times, you look at it on a free cash flow yield basis. And you can look at what Devin just said, which is we're going to produce $5 and change a free cash flow next year, which gives it almost a 10% yield. You look at what Pioneer said, and they said, look, if oil stays at 60, we're going to pay

you out of 5% dividend. If it stays at 80, we're going to pay you out of 10% dividend. So, you can just look at it as, like like these companies are just minting cash and that's one way or another going into your pocket. Mike Santoli, two year, 505. I got the 10 year pushing four. May hit it while we're talking. Sure. And the VIX, the VIX is low. Yeah. I see it on my fact set. I'm assuming this is right at 19. VIX below 20. You're easing back a little bit. Well, look at the index moves. I see it on my fact set. I'm assuming this is right. 19? VIX below 20. You're easing back a little bit. Well, look at the index moves. I mean, how long have we been around 4,000, right? That really is the key input into whether VIX should be moving. You're also seeing a fair amount of

sort of sector divergence and rotation. That does trap volatility. Yes, I get it. Bond volatility has picked up again. That has sometimes been a leading indicator of what equity vols should be. So I don't read it as telling you what the mood of the market is. I tell you it tells you what the pace of it is and the fact that we've been kind of sideways for several weeks now. In fact, it's another one of these multi-week trading ranges. We've had a bunch of them in a row going back to last month. So we've had a nice little comeback as we progress towards the close here. The Dow is still negative by some 57, 60 points or so, but the S&P, as you can see, is positive by near five. NASDAQ is still green as well.

So keep your eye on those rates. They remain very much the story. One more trading day to go before that jobs report. OT begins now with Morgan and John.