Closing Bell - Closing Bell: What to Do at Record Highs 4/16/26

Episode Date: April 16, 2026

Our all-star panel of Hightower’s Stephanie Link, Sofi’s Liz Young and Trivariate’s Adam Parker tell us how they’re positioning with stocks at highs. Plus, former Treasury Secretary Hank Paulson said US officials should prepare for a “vicious” crash in treasuries. Allianz’s Mohamed El-Erian weighs in. And we run through what to watch from Netflix’s numbers. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

All right, welcome to closing bell. I'm Scott Wapner, live from Post 9 here at the New York Stock Exchange. This maker breakout begins with stocks at record highs. Let's show you the scorecard here with 60 to go in regulation. S&P is extending its. NASDAQ is two, but as you can tell, the market is not as robust as it was just a couple of hours ago, because we did take a hit during the noon hour on a headline about a deal to end the war taking longer than many have been anticipating. We'll tell you exactly what that was about in just a moment. Oil's up today, too. stocks, they're leading. No big surprise there. Names like Exxon Chevron and Conoco Phillips doing well. Tech's been a ripper lately and it is up again today. Look at Microsoft. Another solid day. It's been a huge week, by the way, for that stock. We'll have more on

that coming up. The broader software comeback continuing as well. The IGV extending a big week of its own. Look at that. It's up 13% this week. Much needed, right? Elsewhere banks, they're mostly lower today. Goldman's green though. About two-thirds of one percent. Takes us to our talk of the tape. What do we do now at record highs? We're going to ask our panel that question in just a moment. First, though, we go to Megan Kissela. She's at the White House for more on that headline. She's in our D.C. Bureau, excuse me, with that headline that moved the markets today. Hi, Megan. Hey, Scott, that's right. So that was a Bloomberg headline initially in the noon hour that said some European and some Gulf officials thought that it might take about six months or more

to reach a deal between the U.S. and Iran. But then President Trump spoke in the last hour with reporters on the status of that war and the ceasefire that's set to expire on Tuesday with a little bit of a different tune. He said he would extend the ceasefire if he needed to if a deal was close. But he also suggested that a deal might be even possible before that Tuesday deadline. Take a listen. I'm not sure it needs to be extended. Just so, you know, Iran wants to make a deal, and we're dealing very nicely with them. We've got to have no nuclear weapons.

If we do, that's a big factor. And they're willing to do things today that they weren't willing to do two months ago. So the president was leaning overall towards this possibility of notching a deal and extending the ceasefire if needed. But he did also say to reporters that if there's no agreement, then the fighting will resume. So he's not shutting the door entirely on the possibility of returning to active combat. He did say the next round of U.S. Iran in-person talks will probably be over the weekend. And he said he probably will be hosting the leaders of Israel, and Lebanon at the White House in the next week or two.

Scott, that comes after a ceasefire between those two countries was announced earlier today. That was, of course, a step that was seen as crucial before the U.S. and Iran could reach their own broader resolution. Scott. All right. Megan, thank you very much for that update. That is Megan Cassell in Washington. Let's welcome in our panel now. Hi, Tower, Stephanie Link, Trivari, it's Adam Parker. Sofyes, Liz Thomas.

Stephanie and Adam are both CNBC contributors. Good to have everybody with us here post nine. Stephanie, you first? This market's come a long way in a short period of time. What do we do now? As I asked the question at the very top, that's what I need you guys to tell our investing audience out there. What do we do?

Well, I was buying in March, as you know, which was really hard to do. And now we're up 10% from the March lows in the S&P 500. We're up 14% in the NASDAQ. We've had a really good run, and the sentiment indicators are getting a little bit extreme. The fear and greed index that I look at all the time is at 58. Zero is really scared. 100 is really euphoric.

So you're at 58. That's high. And I think we want to pay attention to that. That all being said, the economy is doing just fine. Don't ask me, just ask the banks. Because every single one of the big six banks talked about the consumer being very strong, credit quality being good. Three out of the six banks had provisions that were declines, which is really encouraging.

And they also did talk a lot about loan growth and the H-8 data that we talk about. from the Federal Reserve every week, it actually supported higher loan growth. Well, we actually saw higher loan growth. So all of that is really good for the economy. And then it goes into, we have earnings ahead of us, more earnings, and I think they're going to be good. We've talked about multiples have come down. We're not super cheap, Scott, but we're cheaper. And I think the expectations are, even though they're elevated, I think they will deliver. But I think we may take a little bit of a pause here in the short term. I have my shopping list ready to go. We do? Another one. Yeah. If we do see a little bit of a pullback,

I mean, I'm not sure, we're going to probably talk about software. I'm not sure that this is sustainable. So if you see a pullback in that group, I might add, definitely on the semiconductor side and definitely on the consumer discretionary, because I think eventually we will get past this war, and oil prices will come down. And I think that will bode well for the consumer, and the banks told us that. AP, Tom Lee told me yesterday right here on this show. I think the stock market is in a better position today than earlier this year

when it made its all-time high. And he said, look, the market's been able to deal with high oil prices. Economy and earnings are intact. As Steph said, the valuation has compressed a little bit. Is he right? I have no idea. I don't know what he says. I have no idea.

But based on what you described, I would say bottom of best limits are 18%. What do you mean you have no idea? Well, I don't know. I mean, he's always bullish. So, like, you got to get it right in two directions. I mean, I like Tom, he's a genius. But let's keep it real. I'm asking you if you agree.

You just ask me if you got a down call correct before you can get on the bull train. I understand that, but it's fine, man. We're not talking about Tom Lee. Well, you mentioned him. Talk about what he said. Do you think that the stock market is in a better position today than earlier in the year? Yeah, I do. Why is that so hard?

But I wrote about that two or three weeks ago, and I also called that the market wouldn't be great in the first quarter. So to me, the context matters. And the reason I say it's better now is because the street's got 18% bob-bub numbers. The numbers for this year, as Steffalutu, are higher than they were Jan 1. They've improved. The economic data has been better than people thought. And so you should fundamentally feel better. Moreover, if you look at the underlying earnings, I totally agree with the April setup.

I mean, Q1 numbers are down in every sector but tech, but the full year numbers are higher. So that means the bar is kind of low for April earnings. Should be decent. And we'll see about the second half. We could have risk later, but we don't know yet. And I was just thinking in absolute terms. If you get 18% earnings growth, let's say that's high. Let's say it's 13.

And then you get, the street's got 16 and a half, 17 more in 2027. Let's say that's high. It's 11 or 12. Do you think the stock market's going to be down 6, 12 months or not? If earnings grow 13 and 12, forget the 18 and 7th, I don't think so. So I do feel better about it than I did earlier. Do you think you're going to show up on this show with a Florida tan and that's not going to make me get into it with you? We're not going to, like, bat it around a little bit?

But I just feel like the context matters, meaning like if you're all. always, you know, we all love the same people with Tom and I. But if I've told you he was positive on AI, would you be like, that's incremental? I mean, I think the context matters. That's all I'm saying. So when I look at the world, I would say the thing that I'm not convinced of, I do feel better about the earnings. The thing I'm not convinced of is the multiple.

And that's because I don't think that we've seen any real behavior of companies missing and not going down. That penalty for missing has still been harsh. more companies are beating than missing. But the question is, do we get to the point at all where a company misses little and the stock's flat? Then Steph's probably shopping list is big, because then she knows the skews so positive. Lately, anything, recently Nike, whatever, they're just getting crushed on the prince. Maybe you don't need multiples to expand if you have earnings power through. That's the whole point.

That's one or the other. That's why I feel better because I feel like, all right, I get 10% multiple contraction, 25% earnings grow. That's pretty good. rather the market's 15% higher. That's a pretty good thing. We're up to two people who aren't on today that he's taking shots at. I'm taking shots anybody. I just do facts not fiction. I'm just saying,

that's all good, though. Well, what's for five years? You've got to have context. I like to keep a count. We're all wrong all the time, but you just got to keep it in the honesty chamber. All right. So, Liz, let's talk about what we know rather than what could happen. Okay.

Because who knows what could happen. But what we know now is that the earnings are good. and expectations are up. The multiples come in. How do you feel about what they said? Because I feel like we have agreement. We may have nuance regarding what Tom said and what we have here, but the idea is that this market is poised to go higher.

That's what I have heard. Yep. Do you think so, too? So here's what I think we also know. The market has once again proven that it is resilient in the face of a major shock, something that was a recession threat, a real recession threat, maybe still could be.

Let's say two to three weeks into the war, it was a really big question mark that, you know what, if this goes on without resolution, this is a global recession. That was the threat. And now I think we've surpassed that point because there's momentum toward a resolution, and the market seems satisfied with that and is looking past it. I'll start with Steph's point. I think that there has been a really high-velocity recovery after this drawdown. Yeah, that's for sure.

A lot of the stuff that... There it is right on your screen. If you ever want to show like V-shaped recovery in the dictionary, show that picture. Right. And a lot of the stuff that led us out is the stuff that was the worst on the way in, right? So usually when that happens, you see the junk rally first or everything that got beaten down, you see that rally first, and then we come to a more rational place. I think we're going to settle into a more rational place where tech is leading because the fundamentals for tech are the best, and that continues to be the story. But I do think there are parts of the market that are not yet appreciating some of the follow-on effects of the war.

And they will continue to bake through for the rest of the year. I think consumer discretionary is one of those. There's been a really big recovery off the bottom in consumer discretionary. But I still think the consumer is under pressure and sentiment is at a low right now. So I think there's still some pain to be felt there. And then there are still follow-on effects that EM will have because this is going to hit EM worse than any other region. That will eventually bake through into our economy. I'm not so sure that Stephanie Link agrees with that.

Consumer. And tech leading. Yeah, I mean, don't tell me, oh, I've been buying tech. I know you've been buying some tech. Hold on. What have I been buying? You've been buying some tech. Yes.

But that doesn't mean you think tech is going to lead. No, I think. Because I know you don't. I think it can be one of the leaders. Maybe it's not the leader, I think. But I have said, why can't we have a bunch of sectors do really well? And everything, rally? Maybe.

I don't know. I'm like financials, parts of tech, the stuff that I've been buying, hopefully. Mag 7, I'm not convinced at all. Industrials, anything tied to electrification, I think, are absolute steals at this point on this pullback. And so there's a lot of things that can actually work. Financials, tech, industrials, consumer. It's maybe the everything rally. I don't know.

I mean, it's a stock pickers rally. But wait a second. I want to mention one thing. Industrial metals over the last couple of weeks have actually outperformed precious metals. That's a cyclical, pro-cyclical indicator. So that's why I say, like, there could be, financials should do well in that environment. Industrial should do well in that environment. Even energy, probably.

I don't have a lot in that space. Materials, copper is on fire. So I think there are places in addition to tech. Well, a lot of places, obviously. Well, if you, it's sometimes, some of it's a time frame thing, too, right? If you look a year out from a geopolitical shock, cyclicals outperform. They outperforms. They outperforms.

They are the best sectors. in a broader index. So I think if you're looking at a 12-month forward time frame, that's absolutely right. I hope it's financials. I hope it's industrials. I hope it's materials because that means good things for the economy. And that's all confirmation that we're not just riding multiple expansion that's on air, right? I think that is the hope. In the three to six-month period, I would be more of the camp that I think people return to tech while they're still a little bit nervous. That's see, well, that's clearly AP what people are doing. Nasdaq's going for 12 days in a row. up. That'd be the longest streak since 2009.

Yesterday, the Mag 7 accounted for nearly 90% of the S&Ps gains. And tech saw the largest inflows, according to J.P. Morgan's retail radar since the week after Liberation Day. So people are going back to that place, clearly. Yeah, I like the grade 8. You know, we talked about that. Like, to me, the market can't rally a ton with them lagging like they did. So I'm not surprised they catch up. And, you know, look, the bottom-up estimates from the sell side are for 43% earnings growth in 2026 in tech. again, let's say that's crazy and it's 35% or 30%

do you really think these group are going to be 30% cheaper 12 months from now? I don't think so. I think they're going to go up 20, 25% and probably outperform. And I think the grade 8 are growing faster than the broader market too. So I like that group also. I'm still semis over software. That's still the North Star. I guess we're going to get into software a little bit. So are you not a believer in this bounce that we've had in software? Do you think it's just that? yes, it's been powerful. The IGV this week is, you know, looks unbelievable. I'm going to get to

a name in a second that's really had an incredible week after having a real long lull. But if you look at the percentages off of the 52-week highs for all those software names, even with these bounces, they're still like 40, 50 percent. You're not a believer in this move. No. I mean, when you take like the biggest NASDAQ decline ever, Mark 2000, October 2002, 77 percent over the two and a half years, you had 10 rallies of 15% or more on the way up in the 77% decline. I still think the broader software sector is going to underperform 12, 18, 24 months just because they're going to miss on earnings and then on sales eventually as they have to spend more money, have less pricing power,

there's more obsolescence risk. There will be some individual names that will be good, but I think the IGV will underperform the market over the long term. But you can certainly get dead cat balances. One thing I have a lot of confidence in even more than that industry call is that you don't want to buy cheap software companies. that don't grow fast. If you're going to buy software, buy the ones that are the winners, they tend to be more expensive and growing faster. They have just a lower chance of being

obsolete. I feel like the market is trying to figure out what category Microsoft falls in. It's been a big week, as we said, undeniably. The stock's up about 13%. For more on that, let's bring in McKenzie Segalo. She's tracking that move. Hey there, Mac. Hey, Scott. So this is Microsoft's best week since 2015 coming as investors rotate into software and AI names. Now, it's partly dip by. after what's been a rough year for Microsoft down 30% from its 52-week high. Wall Street, though, getting more constructive on Microsoft's AI position. Morgan Stanley pointing to CIO survey data that show Microsoft is the clearest early winner

and Enterprise AI across the stack. The firm ranked them first among vendors expected to capture the biggest incremental share of Gen AI spending over the next year with strength across cloud, co-pilot, and its agentic tools. And also keep in mind, Microsoft had been one of the hardest hit Mag7 names this year, in part because so much of its business is tied to software. Now, those stocks are rebounding, helping lift Microsoft shares too. And this isn't usually a huge momentum name, right? Only two moves bigger than 5% for Microsoft in the last year. So this kind of surge suggested investors are really reassessing the setup heading into earnings.

Scott? Okay. Back, thank you. You don't own Microsoft. That's too expensive for me. You put a lot of your chips for, I don't know, whatever, into the meta, on the meta table, right? Why has that been the one of choice? Because it's the cheapest, and I think you are seeing monetization.

And I think what they're doing in AI is just the beginning. And they are already seeing monetization without the new AI news that they announced last week. And so they have pricing power. They have time spent, usage is going higher. I like it at 17, 18 times earnings for 26% revenue growth. But I'll tell you, in software, I think you have to be very careful. And Microsoft is too expensive for me, even here, given the growth that you're getting, or limited growth that you're getting.

Something like Synopsis is mission-critical software. So they make software, they make the hyper-scalers more scalable. And the more complex the chips are, the more you need something like Synopsis. And it's trading at a nine-multipal gap to cadence its biggest competitor. they have 70% recurring revenue, 40% market share. They just made an acquisition. So to me, 30 times for something that's growing, 30, 35% is interesting. Service Now, too.

I mean, and by the way, ServiceNow, the CEO just bought $3 million worth of stock. Palo Alto just bought $10 million worth of stock. These companies are mission-critical companies that are not going away. In some respects, I guess, a vote of confidence in the market. The valuations have come down, in my mind. to more reasonable for the growth that you're getting. But I still feel like, I feel like, Liz, the market is wholly unsure of what multiples are reasonable.

What seems to be reasonable because they've corrected so much may end up being unreasonable. I don't think the market has a clue on what to do. You're picking at some names that have gotten beaten down a lot, but I don't know that there's a tremendous amount of conviction behind it. What do you think? I would agree. I don't think there's valuation conviction. I think there's fundamental conviction for long-term investors, and I think that is the way to think about it.

But the velocity of moves right now is, I think, being driven by exactly what you just said, that people can't decide, is this a good price to pay? It's more on sale than it was at the beginning of this year, but it still feels high. And I think that's true. But if we're in a later part of an economic cycle and we're not done with this AI enthusiasm and this AI trade, multiples will just continue to go up. not at the same clip that they've gone up for the last few years, but they'll probably continue to expand. I think it's a healthier place to be if they're expanding and earnings growth is expanding faster, right? I think that's a good place to be. And it seems to me like this is a market that is starting to pay more attention to the fundamentals and trade more in line with

the fundamentals. Case in point is the materials sector doing really well this year. And at the beginning of the year was expected to be the second best sector in the index as far as earnings growth goes. And it wasn't really getting talked about until now. So I think investors are finally getting on board with that. Last word. Even though I told that I don't like software, Steph picked two of the names that I would own, which are Palo Alto and Synopsis. So I don't think synopsis should be in the software sector. I think it should be a semi. Yeah, I do too. So it's just one of those that gets in the ETF and gets down or up for no reason. But it is something that has just got a lot of long-term value. So that's probably my favorite one. I agree with the name she picked.

on security and synopsis. And then the one part that nobody mentioned the entire time, which has been a bad call we've had, and is my favorite sector, is healthcare, which I just feel like if I'm looking at 2030 in the long term, to me the whole point of everything is to get people to live longer and be more productive while they're alive, and that statement has to overlap

with some of the health care services names in a long-term view. So we're sticking with it, tethered to the view, but it's been bad. All right, all right. We'll leave it there. I appreciate it very much. Liz, thank you. AP. Thank you very much.

Thank you, thanks as well. This Stephanie Link. Big earnings report out tonight in overtime. Netflix reports. That stock is on a big comeback swing after losing out in the Warner Brothers Discovery Bidding War. Let's bring in big technologies Alex Cantowicz and Odyssey Capitals, Jason Snipe. Alex and Jason are both CNBC contributors. And Jason, by the way, owns that stock.

So Jason, I'll ask you first. Are you, how optimistic are you? You can't answer that question without taking the recent run into consideration, too. There's no doubt, Scott. Obviously, the name has run up to 27% since the No Warner Brothers deal, right, and up 16% year-to-date. So I think the stock has run a lot into the print. I'm feeling good about revenue growth up 15%, guiding to 15%.

I think they'll beat that. You're roughly around 12 billion, but my real focus is on the ad-supported tier. The target is $3 billion. That's a double from last year. So I think, and it's 5%, roughly 5% of revenue. I think that's going to be where the focus is. Clearly with this

no deal with Warner Brothers, the focus is also on original content spend, which is expected to come in at $20 billion this year. So those are the two areas that are really in focus for me as we go forward for Netflix as a

profit first now season for them. I mean, they have pricing power like nobody else, right? And part of that, I think you would believe, is to help pay for increasing content costs. If you didn't get Warner Brothers, you need to pay more for content now, right? You need to load up? Yeah, I'm surprised that the markets had such a positive reaction to the Warner Brothers deal falling apart. I was in favor of this deal.

I think if your Netflix, the last thing you want is consolidation of your competition. Now you might have a service where you can watch Game of Thrones and South Park and not have to pay for two different services, which will make it much more appealing. So if you're Netflix now, what do you do? Short-term things are going to look good. Your numbers are going to look excellent. But I think what management needs to do is say, hey, we have a lead. We're going to have much more fierce competition coming up.

We're going to spend and spend and spend on content. We're going to take the $2.8 billion breakup fee and throw that into content. We're going to do more live. We've been pulling back on movies. we're going to do more movies and we're going to invest in our bread and butter. And I think really that's the only way forward for Netflix now. What about the big lean in sports, right? You hear reports that they won even more NFL than the little bit that they have now.

What do you think of that? Time for bold moves in sports. I mean, we've seen them be able to create spectacles in sports, the Tyson-Paul fight, for instance. They need a move into more mainstream sports. They've been dipping their toe in the water. This is the thing that drives television viewing. It's the biggest show on Earth. And they should invest in it and invest as strong as they can.

Jason, last to you on the sports idea. Do you like the direction that Netflix has been going? And if they do what Alex next to me suggests they need to, how would you feel as a shareholder? Without a doubt, I think that's going to be very important. Obviously, that asset class is very expensive. But if I look to this quarter what's happened, the World Baseball Classic, which did very well, the K-pop concert, right?

That business, that concert did very well. from a streaming perspective, but I think they can need to continue to lean into this space. Live sports is where it's at, and I think Netflix will continue to run down that path. All right, we'll see. We'll speak you on the other side. I'm sure that. That's Jason Snype ahead of the Netflix print. Got some big news today on Anthropic, the White House moving to give U.S. agencies access

to its new mythos AI tool. Let's get back to McKenzie Segalis. Now for the details here, we'll get Alex's reaction on the other side of that. Hi, Mack. Hey, Scott. So after months of Anthropic publicly feuding with the Pentagon, a new report indicates that the government wants back in. Bloomberg says the White House is moving toward giving major federal agencies access to Anthropics new and incredibly powerful AI model mythos.

The federal CEO at the Office of Management and Budget sent an email on Tuesday to cabinet department officials saying OMB is now putting protections in place that would allow agencies to begin using mythos. Now, that doesn't mean that access is live yet. The email doesn't say agencies are definitely getting the model and it doesn't give a timeline or spell out exactly how they would use it. But what I will say is that up to this point, Mythos has been tightly restricted. Anthropic has shared it only with a limited group of companies because of concerns that bad actors could use it to find software vulnerabilities, but those same capabilities are also what could make it valuable to the

government. It also comes after the vice president was briefed by Anthropic CEO ahead of the mythos launch, the White House really actively laying the groundwork to get back into business with Anthropic, possibly gaining access to one of the most sensitive cyber AI tools now in the market. Scott? All right, Mack, thanks for the update on that. I have to get your opinion. We've talked about the government versus anthropic on multiple occasions. What do you make of this? Well, I was

in the Pentagon earlier this week speaking with Emil Michael, the Undersecretary of War who banned Anthropic, and we had a very interesting conversation. One of the things we spoke about is there's a website called genaI.mill that's being accessed it within the Pentagon, and that's built on top of Google's AI technology.

And Google famously feuded with the Pentagon over Project Maven. and pulled out. And you could think at that point they would never go back into business with the Pentagon. Now they're at the center of genaI.mill. I could see a similar thing happening with Anthropic. Clearly the capabilities that Anthropic is building are too valuable to ignore, whether that's from an offensive or a defensive perspective. And so I actually think this is a good sign that the White House is like, wow, Anthropic just built something. It's our duty to examine it. That email that the CIO of OMB sent out also went to the Department of Defense, even as they're in the middle of

the supply chain risk conversation. So I think this is a good sign for the White House and a good sign for Anthropic and probably good for the country. This technology is too powerful and too valuable for the White House and Anthropic to separate. And maybe this is the beginning of peace similarly to the way that we saw with the Pentagon and Google. Okay, from the Pentagon to Post 9. Appreciate your insight. As always, Alex, thanks. Thanks a lot. Thanks a Alex Cantewitz. Big technology. Just getting started here. Coming up next, former Fed Chair, Now, former Treasury Secretary, Hank Paulson, sounding the alarm on the bond market in a very big way. We'll tell you what he said and get reaction on the other side from Muhammad L. Arian next.

All right, welcome back some provocative comments today from former Treasury Secretary Hank Paulson, who said during an interview that U.S. officials should prepare for a, quote, vicious crash in treasuries due to the mounting government debt. Mr. Paulson declining to put a time frame on that warning. For more now, we're joined by Muhammad L. Aaronian. Aliens' chief economic advisor here with me at post-9. It's good to have you. Provocative, to say the least. Do you agree? I think they're a bit alarmist, but we do have developing a fundamental imbalance between the amount of issuance we're going to see and the amount of money available to buy that issuance. So look at government. We're running deficit of 6 to 7% of GDP. We have

enormous refinancing to be done, and companies are issuing a lot more. than they've had in the past. Similarly, for governments abroad. On the demand side, the money from the Middle East isn't going to be there in the quantity that has been. So the concern he has

is of the so-called doom loop. Yeah. Well, I mean, maybe it takes being alarmist to actually get something done because people have been raising warning signs about that same issue

for a long time, and yet nothing has been done. He says, quote, it's going to take increased revenues, taxes, and dealing with expenses. It would also mean overhauling Social Security and health care programs. You can raise the revenues without a big drag on growth if you close preferences and loopholes in the tax code. So that's a big lift right there. The challenge, he said, is marshalling Congress to do something. We're not going there.

Well, see, when he said that, the first thing I thought about, to your alarmist point, is that look what happened with the first TARP vote. We had, we were on the precipice of the greatest financial crisis, arguably in the history of this country, or you could say 29 in the crash back then, and the Depression obviously hit a different note. But you get my point. To the degree that there was such a level of cluelessness within the halls of Congress that we almost let the system fail. Correct, but we've been spoiled because now we believe, wrongly, that the Fed can buy as many bonds as they need to buy. now we believe wrongly that we could almost do yield curve control, that we could control rates. But he kind of talked about that too in this interview.

Yeah. The minute you mentioned that, buyers get nervous. They want market solutions. They don't want any price imposed on them. So that's a concern. But I think the fundamental issue is that the market doesn't realize we have this imbalance that's going to get bigger. But people keep talking about it. Muhammad, I mean, the question, what do you do about it?

Right? Paulson, I feel like Ken Griffin. I mean, the smartest of the smart in our investing universe in this country, Ray Dalio, and others. I go on and on. Keep talking about this issue, and it's a kick the can, kick the can. At some time, the can's going to get squashed and you can't kick it anymore. What do we do? So the hope, and I worry about it for my kids.

I tell them this, we're leaving you with low growth, high debt, high inequality. The hope is AI will save us. The hope that AI, diffusion of AI, will create productivity gains, and that will increase government revenue. It actually can make the government more efficient. That is the hope. But I agree with you. If the politicians were serious, they would be focusing on reducing the deficit.

You know, John F. Kennedy said, when it's sunny, you fix it. the roof. We've run unemployment rates of 4% or below, and we increase the deficit. We didn't even reduce the deficit. So, yeah, we do have a problem, but I don't think the politicians will do anything about it for now. I sadly, I think many would agree with that comment. So before Mr. Paulson made these comments, I wanted to talk to you about the investigation and to Chair Powell and all that, which the president this week doubled down on. You can get some mistake? Yeah, I think it's a mistake having a really messy transition of the Fed at a time when we need the Fed not only to respond to a difficult situation, but you may need the Fed in crisis management. So you don't want

a very messy leadership transition, and that's what's happening, unfortunately. When do you think the first rate cut comes and then we've got to go? Towards the end of the year. They're going to wait because their inflation target is underwater in a serious way. And Worse is going to be on board with that idea? I think he will, but it will take him time to impose his authority. Look for what he does in terms of reforms to the Fed. That's more important long term than the rates to say. So it's always good to talk to you, especially so when you're sitting next to me here at Post 9. Mohamed L. Aaron, it's good to see you in the house. Still ahead. We're taking you inside alts. The alternative asset managers off to a very strong start this week. Just as a hot new trade emerges,

we'll tell you what it is. Leslie Picker will. She follows the money always next. Welcome back. Alternative asset managers rebounding over the past week. like Apollo and Aries and Blue Owl of double-digit percentages, thanks to validation from bank CEOs this week and the recent gain in software. That hasn't hurt either. However, the turmoil in direct lending is providing a boost to another type of private credit that we don't talk about all that often, but that Leslie Picker follows because you always follow the money,

especially for your inside alt newsletter. What is this now? Thank you. So direct lending's pain has become opportunistic credits gain. Now, for Juniastic Credit, is a subset of private credit. It's a strategy that invests in riskier, more junior debt in situations where managers perceive pricing to be a little dislocated from fundamentals. Now, contrast that with direct lending, which is what we're usually talking about on TV when we say private credit. These are loans ideally made to healthy companies based on a borrower's ability to service their debt.

However, as direct lending has come under pressure recently, thanks to an onslaught of redemptions, Opportunistic credit is expected to serve as a shock absorber of sorts for the private credit ecosystem. And that is why opportunistic credit has become the bell of the fundraising ball this year. Just last week, Blackstone closed an over-subscribed $10 billion opportunistic credit fund. Aries recently raised almost the same amount, exceeding its target and prior vintage size. And Blue Owl also just closed an opportunistic fund above its target. The seven largest opportunistic credit funds in the market right now are targeting more than $50 billion, which is 30% more than the total funds raised in the strategy in 2023 and 2024 combined. So a lot of potential opportunities in opportunistic credit.

Is it accurate to call it in any way a hedge for the private credit operators, funds? I asked that very question to a source I was talking to a. about that. And he said, yeah, it is seen as a hedge. It's a hedge to what's going on in direct lending, but it's also a hedge to just the broader macro environment as well. If you are concerned about there being more distressed situations in the future, more sticky situations, whether from some sort of deal that falls apart or otherwise, that's the type of thing where opportunistic credit would get involved, more bespoke, more complicated situations than your typical bread and butter direct lending fund.

Well, I'm glad you told us about it. Thanks for enlightening us, Leslie. You got it. Thank you. Coming up next, we track the biggest movers as we headed to the close today. Pippa Stevens is standing by with that. Hi, Pippa. Hey, Scott, one chip stock is on its longest winning streak in more than 20 years. The name to watch coming up next. 10 minutes from the bell. Let's get back now to Pippa Stevens for the stock she's watching.

Hey, Pips, tell us what you see. Well, Scott, AMD is the top stock on the NASDAQ today in tracking for its 12th straight positive session for the first time since 2005. Bernstein hiking its price target on the name by $30, up to $2. saying AMD benefits from server CPU strength shares up here better than 7%. Abbott Labs, though, under pressure as the company reported week's second quarter guidance, it also missed estimates on its full-year earnings guide, dialing back the outlook to reflect its acquisition of exact sciences, which closed at the end of March. And shares of Charles Schwab are sinking as it reported a 30% year-over-year jump in profit,

but its first quarter revenue fell short of estimates in a separate release. Schwab also said it's rolling out crypto trading, allowing clients to buy Bitcoin and Ether in the coming weeks. The stock down here is 7.5%. Scott? All right, Pippa, thank you. Pippa Stevens coming up next to Netflix set up just moments away now from that report. What matters most? We'll tell you inside the market zone next. We're now the closing bell market zone. Mike Santoli and PNC asset management's young Yuma are here to break down these crucial moments of this trading day. Plus, Brandon Gomez is watching shares of Pepsico, McKenzie Segalis, looking ahead to Netflix. Those numbers hit in very shortly in OT. Michael, though, you first. Your thoughts? We took a little

dip midday, but we've come back kind of nicely. Yeah, I mean, markets kind of relaxed. I mean, some of the stress obviously has been draining out for the last 10, 11 days. You see another pretty chunky drop in the volatility index, which is something you wouldn't have expected a couple of weeks ago on a day when WTI crude's up 2%. So clearly that dynamic has shifted. people who are a little bit on the glass, have full side. Still a lot of scrutiny as to how selective this rally has been. It really hasn't been all in. It's not one of those huge bursts of upside momentum

that seems like it buys the market months of upside bias. But for now, you know, holding the key levels, incremental new highs are not bearish, if nothing else, even if we do need a little bit of a break. Yeah, it is amazing to see the VIX under 18 again. You know, compared to where people thought it might go. What do you got coming up on OT, Mike? Yeah, obviously we got the earnings you're going to preview here, Netflix, as well as Alcoa, also the CEO of Alcoa at a pretty eventful moment in the global aluminum market.

Oh, yeah, no doubt about that. Good stuff. Look forward to seeing you and Mel Dan. That's Mike Santoli. Brandon, tell me more about PepsiCo today, would you? Hey, Scott. Yeah, Pepsi topping expectations this morning, reaffirming its full year outlook. But the bigger story was how Pepsi achieved that beat. Snacks in North America returning to volume growth for the first time in two years. Remember, the company cut prices on brands like lays, Doritos, and Cheetos earlier this year. Still, though, beverages in the region fell 2.5%. Pepsi leaning into, quote, better for you products with Poppy, expanding energy through Al-Lani Nu, and a brand reset for Gatorade.

Now, CEO Ramon Ligwarta on air earlier today saying the global consumer remains resilient, but more value-focused after years of navigating inflation. Bottom line, PepsiCo is stabilizing, but is still early in the demand recovery story, Scott. Okay, Brandon, thank you for that. That's Brandon Gomez. All right, Mac, it is always a highly anticipated earnings report. First time we really get to hear more substantially from the company post the Warner Brothers soap opera, if you want to call it that. Tell us what's most important this evening. So, Scott, the street very bullish going into this print with the Warner deal now dead, as you said, and a $2.8 billion breakup fee in hand. Netflix heads into earnings with one of the cleanest setups in media. That puts more pressure, though, on Netflix to prove it can keep compounding on its own, even as investors increasingly stack it up against broader ecosystem players like Amazon and Google. So this quarter really about guidance and margins, the clearest sign its ad business is scaling.

That March price hike, its second and less than two years, also something to watch. But the bigger focus is on how management guides on churn and engagement, if margins improve in the company sounds confident about the year, that strengthens the case that Netflix can drive its next leg of growth without needing M&A. Scott? All right, Mac, thanks. Matter of moments.

We'll see that report hit. We'll see what happens on the other side of the stockmark because the stocks had a nice run into the print. Young you, it's nice to have you. Speaking of stocks having a nice run, that is the understatement of the year because of this V-shaped recovery. Are you believer in it? Can we continue to move higher?

Is there enough momentum? Yeah, Scott, great to appear. It's definitely the understatement of the past 11 days. That's for sure. It's been fantastic strength that we've had in the equity markets. The markets are refocusing on what's going right. We do think this can continue now that some of this tail risk has been removed from the market. There are a number of things that have actually been going right over the past 30 days or so that haven't gotten the attention that they otherwise would. One of those is that the AI-driven productivity expectations are really cementing or people. people are getting more confidence in them. Financial conditions are looking more stable than people had anticipated.

The labor market is looking stronger than people had anticipated. So you get a number of things here coming together that we think can help to have the market continue higher here. I mean, it feels like we have just completely moved on from what could go wrong, right? You talk about, well, what could go right? Obviously, the market's been focusing on that. Are we too complacent about the other side of that equation? Well, the risks haven't gone away, but some of the tail risks have been significantly diminished here.

We think that's very important. It would take a big shift here for the market dynamics to turn back around. We do think the tide has turned. We do think the trend has reasserted itself in a positive direction. But the risks aren't gone, right? There's still uncertainty that's lingering issues that are not resolved here. But we do feel confident that the market is taking the correct approach of focusing on what's going right, given that the major longer-term disruption concerns to energy are looking

less likely here. Well, speaking of trends, tech, that's returned to its former trend, hasn't it? And does that continue? We think it does. We think the productivity gains that tech is going to be the primary driver of, of course, the gains are going to be broad based throughout the economy, but tech facilitates all that. And so whether it's semiconductors, areas of technology, we do think that tech is going to continue to reassert the leadership that it's reasserted in the last 10 or 11 days here. We're not being fooled in any way by this bounce in software, which I don't sense I have a tremendous amount of believers in?

I don't know about being fooled, but I do think that probably a bottom is in. Right now, it's much more of a sorting process. which of these software companies can implement AI in a way that delivers a type of value that clients will be looking for, given the competing factors and other areas to implement AI in their enterprises. So I think it's now a question of who can innovate. And valuations are much more reasonable than they were just a few months ago. It's funny.

When the market's on a heater like it is, we don't even talk. about private credit or any of those risks. I know you said there are still risks, and that was a principal one, at least we thought. Maybe the bank CEOs calmed some fears during their earnings reports, but it is interesting how we seem to have pushed aside almost everything and now have our eyes focused on this prize of still strong economy, still growing earnings, and an even cheaper valuation than we had before. Yeah, that's right. Banks mitigated or quelled some of that risk, but also some of those dynamics

that we just talked about a few minutes ago in terms of some of these opportunistic credit funds, that has helped to cut through the risk as well. Thanks for counting us down to the bell, which is ringing and we'll finish green across the board. I'll send it into overtime. Mike and Melissa, Netflix. Moment's away.