Closing Bell - Closing Bell: What’s the Best Move for Your Money? 4/11/23

Episode Date: April 11, 2023

Should investors take advantage of this early year rally and sell some winners or hang on for another leg higher – if one should come? Liz Young of Sofi and John Mowrey of NFJ give their takes. Plus, top technician Jason Hunter of JP Morgan is charting the rally. Why he thinks more pain could be ahead. And, Alger’s Ankur Crawford breaks down the under-the-radar growth names she is betting on. 

Kelly thanks so much welcome to closing bell I'm Scott Wapner live from post nine right here at the New York Stock Exchange this make or break hour begins where all roads end tomorrow morning's critical CPI report the latest read on inflation top technicians already gaming out the reaction in markets you will hear from one in just a little bit who lays out where stocks might go no matter what the print is in the morning here's your scorecard with 60 minutes to go in regulation. Kind of a nice session working here towards the close. Cyclical stocks like energy and industrials are leading us higher. As Treasury Secretary Janet Yellen suggests, the economy might just avoid a big downturn. Tech is the weakest of the S&P sectors today. That's leading NASDAQ lower,

certainly not as low as it was earlier. It's trying to work its way back as well. Yields, they're up a touch as well ahead of tomorrow morning. That takes us to our talk of the tape. Whether your best move right now is to take advantage of this early year rally and sell some winners or hang on for another leg higher should one come. Let's ask John Mowry, chief investment officer from NFJ Groupies here with me at Postnight. It's good to see you again. Welcome back. Thanks, Scott, for having me back. He's here with me at Post Night. It's good to see you again. Welcome back. Thanks, Scott, for having me back.

A lot of people are still bearish. Are you as bullish as you've been when you've sat in that seat? Well, I first want to comment on a statement you made that people should maybe take profits. I think the problem is people haven't been invested. So, you know, last quarter you saw $500 billion flow into money markets and cash. That's the largest number since March of 20. So people are very overweight cash. When we meet with our clients, meet with investors,

a lot of people are saying we're overweight bonds, we're overweight cash, we're overweight staples. So I think that people have not been positioned for it, and it's kind of been a nosebleed rally as it's moved higher. Because they don't believe in it. They think it's just yet another bear market bounce, and the real tell is what's going to happen next. And you may go back, they say, to test the lows.

I mean, even some of the most bullish that we speak to, like Brian Belsky, not that he's turned into a bear, but he says, quote, that last night in a note, for the first time in many years, our enthusiasm for stock market performance potential this year is relatively tempered. I mean, that's Belsky. He's as bullish as they've come. You are, too. Well, I would say two things. So we've had two big quarters in a row, the fourth quarter and then the first quarter. I mean, those are like, you know, 7% plus quarters in a row. So that is significant. What I would say is from a portfolio manager perspective, it's hard to always talk about the macro, you know, it's filled with riddles. But on a bottom-up basis, I do think

that some of the semiconductor stocks have gotten less attractive. Homebuilders have gotten less attractive. Some of the machinery stocks have gotten less attractive. Home builders have gotten less attractive. Some of the machinery stocks have gotten less attractive. But what is attractive, Scott, application software, life science, REITs, and I know you're going to bring up financials at some point, and yes, financials do look interesting here. So I think there are opportunities for investors, and I think that just because it's snowing and you may have to put on your goggles doesn't mean you shouldn't go down the ski mountain.

No, but are you still going to slip on the the ice if you try and get into the market thinking that you know everything's going to be just fine not if you're not overpaying so what occurred in october was that people basically dumped everything they sold all the stocks they did not look at valuation they were they were fearful the rates would just continue to grind higher they were also fearful that we were going to move into a massive recession. Both those things have not occurred, and it created that dislocation. We're having the same thing happen now in real estate, in banks, and in some of the other areas I mentioned. We don't know what's to come in real estate, commercial real estate.

And frankly, we don't really know what's yet to come for the banks either. We don't, but a couple things that I would say about that. The first is that, yes, are there some boiling frogs out there in the real estate market? Probably. There probably are some. But that doesn't mean you don't want to have any exposure. I mean, for example, the S&P 500 banks are roughly 5% of the S&P. So if you say, I don't want to own banks, I don't want to own REITs, then just throw out the S&P. Get rid of your allocation. So I think that you have to address those industries and sectors. And for example, Scott, regional banks now have a 200 basis point premium to the 10-year with dividend growth versus no growth on the 10-year.

So I do think there are compelling opportunities. In regional banks? In regional banks. The super regionals in particular, I think, are an interesting place to look at because they could be beneficiaries of what's going on with the smaller banks where you're seeing deposits flow away from those. The whole conversation, I think, hinges on whether you think, you, the greater investment community, thinks that things are going to get worse from here or if we're in the process of troughing, whether it's from earnings or the economy.

Chris Harvey, Wells Fargo, says sell before May and go away. And he was looking for a rally, but he's also realistic on what might lie ahead. He says we're within spitting distance of 4,200. That was our target on the lie ahead. He says we're in spitting within spitting distance of 4,200. That was our target on the S&P. Now we're shifting direction. Expect a 10% correction in the next three to six months, a front end inversion, a 7% year to date run, and a banking crisis that will likely take an economic toll triggered our reversal. It's an interesting comment on the banking crisis. Well, he's not necessarily wrong. It's a very fair opinion. And again, we are up 7%. So it wouldn't surprise me

if we had some bit of a correction. Something about the banking crisis, I will say, in 2008, that was an asset crisis. That was a loan crisis. This is a liability crisis. It's the other side of the balance sheet in terms of what's occurred with maturities, rates, and what they were invested in. What the Treasury's done, Scott, is they've come out and they have basically said there's a Treasury put. Everyone's used to talking about the Fed put, but we've got the Treasury put. And the Fed put will come if they have to. And I do think what's going on with credit absolutely will slow the economy. People toss around, is it 100 basis points that has been factored into that slowing?

No one quite knows, but there's no question that credit is going to slow and that's further going to contract the economy. That being said, I do not think that investors should be moving away from stocks because the dislocations have already occurred for many of these companies because of what's going on in the credit market. Now, maybe today, yesterday, you have a bid in some cyclical stocks as we started the show. Today, the pillars of the world. Well, I mean, it's not there's been more than just today, Scott. Come on. It's been a couple of days, six months, maybe six months.

I mean, growth has been dramatically outperforming value for the at least since the beginning of the year. We agree on that. I agree on that. One hundred percent. The Nasdaq's in a in a in a technical bull market. So tech stocks got blasted last year. Right.

They got absolutely destroyed. Value outperformed. Oil held up. Utilities held up. Staples, those are the places to be. I think that investors needed to be rotating away from those semis, homebuilders, and those areas were more attractive back then. But today, Scott, I do think the NASDAQ, because of its top-heavy nature with some of the semis, is getting a little bit less interesting, in my opinion. So if you look at NVIDIA or you look at homebuilders, something that would say about semis and home builders. Home builders having a nice day today too.

They are having a nice day. Right on the day where Whirlpool got a nice upgrade and is up a lot. Whirlpool did as well. And that's a name that we do like. But what I would say is that NVIDIA, because of its unique position within AI and alternatively home builders, because of structural supply challenges with housing, both those areas were the first to go on a kind of a risk-on mood. I think that the next turn of the dial is going to be looking at other assets where you've seen those dislocations, and they have not re-rated. You want me to buy industrial stocks here? I mean, you talk about some machinery stocks being expensive.

What about pure industrial plays? Well, I think that, are you talking about conglomerates or pure plays? I'll talk about any part of the industrial complex. I think some industrials look very attractive. Copart, for example, is a company that has a duopoly in the auction salvage market. That has a very consistent earnings profile, very clean balance sheet, and it should benefit in multiple environments. If we have a downturn, they tend to be more defensive.

If you have a cyclical economy that's doing well, that name tends to participate. So they're absolutely pockets, but I do not think that all industrials are as cheap as they were. I think that you need to look to discretionary REITs, banks, materials. Yes, I'll go there. We like materials. We like gold. Well, a lot of people like gold because gold's had a great run. Well, that's true. We were overweight gold six months ago. So we were waiting for this. And part of that was predicated on cheap valuations, stronger balance sheets. And you also have had the gold stocks do many things like the oil companies. They've cut back on CapEx. They've made it much more profitable. And if the dollar continues to weaken, Scott, which has been occurring since Halloween, roughly 13, 14 percent, that is going to be another boost to the miners in addition to

what's going on in banking. All right. Let's bring in Liz Young of SoFi, who's sitting here with us as well and has been listening to the conversation. Welcome. Good to see you. Thank you. You know, from listening to John and, you know, his appearances here that he's more bullish than most. Yep. And he doesn't really sound like he's backing off that much either. No. Is he too bullish? I respect it. Definitely more bullish than I am. I don't know. I won't say that you're too bullish, but I do think that... Well, you can say that. I mean, if you think he's too bullish, just say it. I'll respectfully disagree. I think that we're at a point now where there's this sort of crescendo of negative news that's about to hit. So we've got

earnings obviously kicking off this week. This earnings season would be the one that confirms an earnings recession if things come in as expected. I'd point out, which I'm sure many other people have pointed out, that we haven't seen revisions downward since the banking crisis happened in March. I think there are revisions downward coming. So even the expectations that we have right now for a negative 6% growth quarter probably gets worse. And the second quarter is also expected to be negative. So I say that because that's sort of part two of a three-part series of an economic contraction. The first part is that you have bear markets, which we all know that we had in 2022. I do think that the equity market is going to pull back again if and when we confirm an earnings recession. And then part three is that you confirm an economic contraction. And I think that is also

coming. I think this commercial real estate stuff and the contraction in credit is not to be ignored. And it's just the beginning of further headlines that we're going to continue to get. What's your rebuttal to that? That sounds like reasonable. It is reasonable. It sounds to me like the bulls are the ones who have to go out on a limb. The bears don't necessarily have to do that or people who are more cautious because the story is right in front of them. And it seems to read rather well. You get paid to take a risk. You got paid to take a risk in October. And I think you're getting paid

to take risks in certain industries and sectors. If you took risks before October, right, you got you got crushed. There was no reward last year early if you took risks before October, right, you got crushed. There was no reward last year early if you took risks. Well. I mean, there's always a time to take risks. Why is now the time? Because I think that if you look at specific industries, so what I would pivot and say is if you look at certain industries,

certain sectors, I do believe the valuations are retracted. Financials, you're looking at the steepest valuations, not just on a PE basis, but on a price to book and a yield basis, going back to March of 20. So if we could all, you know, get in a time machine, go back to March of 20, would you want to buy stocks? Well, we, I mean, we're in a wholly different, but financials are back to that level. So would you want to buy financials in March of 20? Well, maybe they're cheaper for a reason today than they were then. Well, they were cheap for a reason then. And maybe it's a bigger reason now. It may be. But I would argue that when the valuation dislocations are there and you need to go through, you can't own just any of them. I think

that some of them have weaker balance sheets, et cetera. But I don't think you want to write the group off. For example, Scott, financials are the best performing sector coming out of downturns handedly. You do not get a rally without financials participating. That may be fair and fine, but are they the best performing going into a downturn? We're still having a debate as to whether we're going in, not coming out. Well, I think that we have gone through, you know, we had two negative GDP quarters last year, and I think that's part of the riddle because that was not called a recession, but that did create a big dislocation. So we already had two negative quarters. It was not called a recession, but that did create a lot of dislocation in the market, semis, banks, et cetera.

So I would argue that. So we already had the recession? No. Well, I think that you had market participants expecting the recession. And I think that created the dislocation. We have not had the recession and the recession we're getting much closer to. I think there's a much higher probability we do step into a recession. If tomorrow comes out and they say there's a recession, are you going to sell stocks? We didn't have the recession yet because the business cycle didn't reset. The two quarters of negative growth that we had in GDP were caused mostly by an imbalance of exports and imports. The business cycle did not start over,

right? Inflation wasn't solved. So when you think about just what happens in late cycle behavior, you usually have high inflation. You have the Fed hiking rates. Some of those ingredients were present, but the Fed was just starting to hike rates at that point. We didn't have that reset. We had a little reset in valuations at the time and then a bigger reset in valuations as the year went on. But the economy didn't slow down. And then it just continued to overheat to a point where we are now, where the Fed continues to try to save it. And I heard you say earlier in the show that the Fed put would be there. It was I'm parsing a little bit. The Treasury put. That may be true, but here's the problem. He's the one that quoted you correctly. I did not. Apologies. The problem is, even if that is there, if it occurs in the

next, call it two months, it's going to occur with an inflation problem that still exists. And that's really what the Fed has been trying to avoid, which is exactly what happened back in the early 80s, where we didn't quite get a handle on it. And then it just took off even more. So I think we're stuck right now in a period where we almost need to hear some of this negative economic data. We need confirmation that things are slowing down and that demand is a problem, perhaps because credit has contracted, in order to reset the cycle. I think the question right now isn't necessarily, are we going to have a contraction? It's how bad is that contraction going to be? And how long will it take us to come back out on the other side? As we know, the drawdown is

usually much faster than the recovery. So I think that's probably the bigger risk. I would agree with that, but I would make two points. The first is that there is a symmetry to the inflation spike. When you see things that have gone up to the degree that you saw inflation go up, I would argue that you should expect a similar pullback, and we are seeing that in the numbers. They are coming through, and if you annualize the last few months, if you annualize the last four months, it is much lower. It is. If you annualize those last four months and, Scott,

M2 is the most negative since the Great Depression. If you adjust it for inflation, the whole problem is what we've learned from some of the data is inflation is sticky. It is still sticky. It's not plummeting down at some big, you know, go off the cliff. I mean, it's coming down, obviously, and undeniably, we'll see about that. I think how many times we need to see before before we say that that's not necessarily the case? Well, I mean, again, step back. The Fed had the patient on the operating table. They injected the patient with morphine, and then they started hacking at the patient and said,

OK, you've got to get back on the operating table because there's a problem. So we created this issue because of a supply chain dislocation with China and then pumping the economy with money. So it has been stickier because we needed people to go back to work. We were incentivizing all those people to go back to work. But nonetheless, inflation is rolling over. You're going to see rents continue to moderate. And I do think all the numbers are going to point to lower inflation. Number of Spain's inflations come down. Central banks around the world have already said they're going to pause. And the Fed's close to pausing. They're close to pausing. What if they hike next month?

I hope they don't. I think that'd be a mistake. They might. I mean, hope doesn't get you anywhere. What if they do? Well, if they do, it doesn't change my thesis, but I think that that's going to, it's like blood flow restriction therapy.

The more you tighten it, the more you're going to have to loosen it. So I think they're just backing themselves into a corner if they continue to push it higher. I think that's why the futures are saying that you should expect cuts because the market knows, it's kind of like training for a marathon. If you say, I've got to train for a marathon, I've got 30 days, I'm going to add a day, I'm going to add a mile each day. Are you

going to make it? You're not. You're going to be injured. And I think that the market's looking at this and saying, you will not make it to the marathon. You cannot add a mile every day and run a successful marathon. You're going to get injured. So I think that the market knows this. It's why it's pricing that into some degree. And I do think that if you look at the trajectory of rates, they're going to have to move lower at some point, Scott. Unless, Liz, the market has to get more in line with the Fed like it did not all that long ago. Like Leisman says of the jobs report last week, it was weaker, but it wasn't weak enough to keep the Fed on the sidelines. Is the Fed going to be on the sidelines with John's market up a lot? And

Treasury Secretary Yellen saying today that the economy is obviously performing, she used the word, exceptionally well. Solid job creation, inflation gradually moving down, robust consumer spending, not anticipating a downturn in the economy. Does that sound like, you know, this is a former Fed chair herself. Does that sound like a Fed that's about done? That, well, I think that's an interesting comment that she made. But in terms of, is the Fed almost done? She's channeling you. Well, she is. But I guess I'm a little surprised that she was that, you know, poignant and aggressive with some of those with some of those points coming from her. But nonetheless, I do think that

the rates are going to go lower, Scott. Inflation is rolling over. You already see it. The numbers are coming in. I do think by the end of the year, we'll be at three and a half inflation. It's hard for me to see a scenario where inflation remains as sticky as it is with the credit contraction that has occurred because of the three S's, Silicon Valley, Signature, and Silvergate, plus Credit Suisse. We've had four bank failures. Liz, the last big word to you. I am also surprised at those comments. I think that there is a good amount of evidence that consumer spending is slowing down. We've got retail sales coming later this week. There's

also a lot of data that's going to come in between now and that May 3rd meeting. And I think that there is a really good chance. We'll also have half of the S&P 500 earnings by then. I think there's a really good chance that there is a market hiccup at best and it will maybe scare the Fed out of going again. I don't know that 25 basis points makes that much of a difference. I don't know that the juice is worth the squeeze. And as we've seen, the expectations in the market can change very quickly. So if I had to put my money on it today, I don't think they go again. Real quick. Can I make one more point? You got to do it quick. I'll use a shower analogy. The Fed says, hey, we've got a lot of analogies. We're turning off the top of the shower,

but then we're going to turn on the bottom because they're good. We're going to turn on the bottom. They've already offset all the QT they did by opening the discount window. They've already offset all of that. So they're saying to everyone, hey, we're restrictive. We're going to keep raising rates. But then secretly, you know, they're turning on the faucet below. So they've already started easing. They've already had to expand. And some look at that and say that's exactly why inflation is not going to come down as fast as you and others say that it will. OK, I'll see you later in the market. So I'll see. All right. That's John Murray. Liz Young. Thanks so much. Thank you. All right. Let's get to our Twitter question of the day. We want to know what will tomorrow's

headline CPI number be above six percent, five point five to six or below five and a half. You can head to at CNBC closing bell on Twitter. Please vote. We got the results coming up a little later on in the hour. We are just getting started, though, here on Closing Bell. Up next, rally or retest? Top technician Jason Hunter is back. He's breaking down where he sees stocks heading from here. And later, under the radar, growth picks for your portfolio. Alger's Anka Crawford is back, highlighting where she sees opportunity right now.

So join me right here at Post 9. We're live from the New York Stock Exchange, and you're watching Closing Bell on CNBC. Highs of the day for stocks with just less than 40 minutes to go. Look at that Dow moving towards a 200-point gain. S&P near 15 points as well. That's a third of a percent. And even the Nasdaq, which has been down for the entire day, is now trying to work positive as we have this conversation. Let's go to Christina Partsenevelis now, who has a look at some of the stocks that are perhaps leading us higher here.

Yes, and CarMax is one of them because of its quarterly earnings just smashing analysts' expectations, thanks in large part to cost-cutting efforts and not demand. And it's not necessarily all good news. The auto giant missed on revenue and cited a number of headwinds, including rising rates, tightening, tightening lending standards and low consumer confidence. Nonetheless, the stock is on pace for its best day since April 2020. You can see shares are up almost 11 percent right now. Bitcoin talking about some positives, still trading above $30,000 for the first time since last June. That's giving a nice boost to Coinbase that you're seeing here up over 6% as well. Smaller crypto players like MicroStrategy up 7% and Marathon Digital, you can see, up almost 17% at $10.60. Scott? All right, Christina, we'll see you in just a bit. Christina Parts, Novelist, thank you.

S&P 500 bouncing more than 6% over the past month, driven by a rotation back into the mega cap tech trade. Our next guest, though, believes the charts are signaling a poor risk reward setup from here. Joining me now, Jason Hunter, J.P. Morgan's head of technical strategy. Welcome back. It's good to see you. I mean, I just finished a conversation with somebody who is pretty positive on the market, but then I have a guy like Chris Harvey who says sell before May and go away, that it's not so great. What's your take? Yeah, I would agree more with the latter. Ever since the market had gotten, the S&P 500 had gone to 4,100 in early December, we shifted from a positive bias, which we adopted in the late

September, early October period, when the index actually looked attractive at 35, 3600, to one that's, you know, take your chips off the table and even increasingly getting more and more negative as we move into this year and see the rotation that we've seen where the risk reward does look very unattractive at these levels and, you know, the asymmetry to the downside, even in our base case view, which is a retest of 3,500, is an attractive. And then there's also the risks that come with slowdowns and recessions, the nonlinearities, the feedback loops that potentially could kick in. So certainly at these levels, we don't like holding risk here.

You have these events, though, like tomorrow morning, which could throw a wrench in what technical analysis would typically tell you to do. Isn't that correct? Yeah. So with the CPI print that's coming tomorrow, we not only look at the world from a, you know, through a technical lens, we do a lot of cross-market modeling and a macro overlay to our work. And one of the things we look at is the S&P as its price versus Fed expectations. We've been using a model for many quarters now that look at the terminal rate, how much easing price on the back of that terminal rate. And given how dovish the market's price, they effectively have the Fed going to roughly a 5% terminal rate, but 235 basis points of eases on the back of that. That's basically taking the Fed back to neutral. So could there be little

shifts around the edges for that? We don't think that's going to be a huge game changer here at this point, whether that takes the terminal up and puts another hike into the forwards or whether that speeds up the pace of eases. At this point, with the Fed priced back toward neutral within a two-year period, give or take, we think that's as dovish as the Fed's going to get priced unless you start to price in something like claims starting to move substantially higher or the demand side really breaking which naturally wouldn't be a good thing for equities either if i give you a pullback what's a key support level that i need to look out for so i would say tactically right around just above the 4 000 level for the s p a move below that would certainly sideline the bullish short-term

momentum and start to get the market into youTA signal levels that could trigger some momentum-based selling. Bigger picture, $37.60 has been the key support on this range within a broader range that's been playing out over several quarters now. In my view, the break below that $37.60, that will be when market participants fully embrace the idea that we are going into a slowdown. And like I said, our base case view is an ultimate bottom near 3500. We're waiting for that capitulation, though, before we suggest it's time to put money to work again. How should you view or how should our viewers view what's gone on in tech and some of

these growth names? Obviously, a tremendous rally that we've seen from the beginning of the year in Nasdaq. How vulnerable does that part of the market look to you so again going back to that cross market model that we use pricing the various indices against the shape of the money market curve things like the jp morgan economic surprise data index with that sharp rotation that started out in january as a position squeeze where people were very underweight uh the quality growth names that the first part of this this rally that we've seen in 2023 was a short squeeze, where people were very underweight, the quality growth names, that the first part of this rally that we've seen in 2023 was a short squeeze or an underweight squeeze, let's call it. Everything over the past, let's say, month, month and a half, that's been more, seems like more of a chasing rally momentum to the upside. At these levels now, the Nasdaq is actually more overpriced versus the shape of the money market curve

than the broader S&P is. And really what that is, is overpriced versus the shape of the money market curve than the broader S&P is. And really what that is is a very crowding in a handful of names. If you look at the market breadth as it's rallied over the last month, it's really mega cap tech and then the defensive sectors. We've like today, we've had the occasional day where cyclicals have led. Today the day where OPEC surprised with the cut in production. But that's been the exception. It's mostly been defensives and mega cap as money has moved to things like quality and a few big names within the NASDAQ. Given how much that rally has unfolded, though, we think at this point,

mega cap tech may actually be more at risk than cyclicals when the data really starts to show signs of a slowdown. Yeah, we shall see. Jason, I appreciate your time very much. Thank you. That's Jason Hunter joining us, as you see there, from J.P. Morgan. Up next, trading major market shifts. Alger Zanker Crawford is back. She's flagging some big changes in market trends as well.

Ideas where she's putting her money to work right now are next on Closing Bell. growth stocks outperforming value names by nearly double so far this year and our next guest says the recent rotation is helping some lesser known names in that group let's bring in anker crawford once again executive vice president and portfolio manager at alger welcome back i mean we generally talk growth, stocks when you come, tech and stuff like that. I just want you to react to what my prior guest said about looking especially vulnerable

given the move that we've had. Do you agree? I think, again, we have to we have to parse out growth. There's some growth that is looking a little bit pricier and more expensive. What's that? Which kind is that? The mega caps?ier and more expensive. What's that?

Which kind is that? The mega caps? Not the mega caps. So even though they've run a lot, they don't look too expensive to you. Well, what's interesting about the mega caps is they have a lever that a lot of other companies don't, which is taking down their labor force and protecting earnings and actually growing free cash flow and earnings. I would say some of the mid-cap higher growth names, those are going to be more at risk and they have run on a relative basis and have outperformed. Your pitch today is that we should look at some of these lesser known names that we don't talk about probably enough in your estimation names that you like Acadia healthcare is that one absolutely so so healthcare in general becomes a

bastion of safety in times of volatility like everybody likes it right now yeah so you know it had a pretty rough q1 and has come rebounding back as we worry about the economy a little bit more. And Acadia is a behavioral health hospital. Unfortunately, we do have a mental health crisis in the U.S. and an addiction crisis. There's 35 percent of their beds are devoted to addiction and they should benefit from the opioid settlements. But there's also this supply demand imbalance in the market. So for a mental health hospital that is growing beds 30% over the next three years, we think it sets up to have good growth but also have good visibility. So I'm looking at AMD, right?

Because NVIDIA gets all the headlines for obvious reasons. I mean, the stock is up a ton. And the valuation is too. Now, why is AMD? Now, AMD is no slouch either. I mean, it's up more than 30% in the year to date, 35 as a matter of fact. So why is that on your list?

So AMD, you know, people forget that they too are a beneficiary of the compute that is going to be required to drive the next decade of generative AI and AI and cloud computing. Which is why NVIDIA has gotten all the love, right? That's right. Because it's all about AI hype. Right. And AMD is a little bit behind NVIDIA in terms of the technological progress that they've made. However, they will be there.

So will they capture 80% of the market? No. But they will take their fair share of the market. What about the consumer? You're not giving up on the consumer just yet, are you? Well, you know, some of the consumer. If you look at the Chinese consumer, we're not giving up on the Chinese consumer. We think that it's misunderstood that China hasn't really reopened in the way that we would have expected. However, you know, there has been friction in the Chinese economy,

i.e., you know, as the consumer wants to travel, they actually can't travel because the planes aren't reactivated. There are not enough pilots. And so Chinese travel is still at, you know, 40% internationally of what it was pre-COVID. Domestic travel is 80% of what it was pre-COVID. Domestic travel is 80 percent of what it was pre-COVID. And we think that's just a frictional issue. And the Chinese consumer will begin to travel again with pent-up demand. Let's look to tomorrow morning. You sat down and you said you see the options market is implying a huge move in the morning. Yeah. A big binary event

is coming tomorrow morning with CPI, isn't it? Well, I didn't think so, because I kind of felt like the days of worrying about CPI were behind us, in part because it was a tell of where the Fed needs to go. And I think, you know, even the Fed understands that, you know, it's 25 bips and they have to be done because they're walking a very fine line right now. I don't envy Powell right now, given how fine a line he has to walk. Because the banking issue that, you know, we're still worrying about, the run-on effects of what happens with credit, et cetera? Absolutely. So on the one hand, you have the banking issue. On the other hand, if you ease too fast,

you'll get runaway inflation. And so if they want to get to their 2% target, which I still don't understand, and why 2% is the target, but we are still running at, tomorrow is going to be 5.2 or 5.6 on headline and core, which is what is consensus. So I think that they're really between a rock and a hard place right now. Does that keep you from being more bullish overall in the market

because you're worried about pushing it too far, even further than some say they've already done? Look, I think we have to be very data dependent right now. I'm looking at employment numbers and seeing how those trend and at what ferocity they decline. You know, last time I was here, we talked about 3,800 to 4,200 kind of dating the market. And we're still bouncing around in that range. Can't get out of this range. But you have sector rotations.

So it's interesting because, you know, tech did very well and health care did poorly. Now industrials are starting to fall off and health care is coming back. And so you're getting these fierce sector rotations at the same time as you're bouncing around the market. Good to have you back. We'll talk to you soon. Anca Crawford from Alger joining us once again right here, Post 9. Up next, we're tracking the biggest movers as we head into the close. We have about 20 minutes or so to go. Christina Partsenevelos. Analysts are betting Whirlpool shares can rally 20 percent. I'll have those details and much more after this very,

very short break. Just shy of 20 to go before the close. Let's get back to Christina Partinovalis now for a look at more stocks to watch. Christina? We've got home construction and improvement. That's a theme right now. Mohawk Industries is higher as Loop Capital upgrades the floor manufacturer to a buy from hold. Analysts say the margin outlook is improving as raw materials and logistic costs return to historical norms. Just in time for all those renovations this summer. Whirlpool also getting an upgrade from neutral to buy, this time by Goldman Sachs.

The firm believes promotion activity stabilized in March and could support pricing and drive profits. Whirlpool up 4%. And we'll end on Carrier Global, which is in positive territory as the company considers selling or spinning off its fire and security unit. That's according to the Wall Street Journal. The stock is up 3 percent. Carrier Global. Scott. All right, Christina, thank you. It's the last chance now to weigh in on our Twitter question of the hour. We asked what will tomorrow's headline CPI number be above 6 percent, five and a half to six or below 5.5. You can head to at CNBC closing bell on Twitter.

The results are after this break. And tomorrow, do not miss an exclusive interview on this program with Warner Brothers Discovery CEO David Zaslav. That coming on the back of that company's big streaming event. Can't wait for that. We'll be right back. The results now of our Twitter question. We asked, what will tomorrow's headline CPI number be? Five and a half to six is in the lead with 40% of the vote.

Remember, 6% was the last headline read. So that's going to be an interesting print. If that's in fact what it is, see what the s&p 500 does on the back of that up next moderna's move lower today we'll dig into that uh what wang on that name plus an under the radar apple supplier for your portfolio nfj's john maury back with us to make the bull case for that stock when we take you inside the market zone next Here we go in the closing bell market zone John Mowry is back of NFJ Investment Group he has a bull case with the emerging

markets and one Apple supplier that he thinks could be a big winner. Make Terrell on Moderna's weakness today and Bob Pisani here with us again breaking down the crucial moments of the trading day John married you, what is this Apple supplier

and an emerging market play at the same time? So I'll start with emerging markets. Emerging markets are over 50% of global GDP, but they make up only 15% of the AQUI, of the total world portfolio. So they're very underrepresented in indexes. They're also equally underrepresented in people's portfolios. So I think there's a lot of reasons investors world portfolio. So they're very underrepresented in indexes. They're also equally underrepresented in people's portfolios. So I think there's a lot of reasons investors should look. Specifically, though, Scott, with LuxShare, you probably haven't heard of the name, but if you have a pair of AirPods in your pocket, if you look on the back, it'll say LuxShare Precision.

Indeed I do. Okay, well, then there you go, LuxShare Precision. So you're a customer. So LuxShare in 2018, Scott, had just $5 billion in revenue. Today it's $33 billion and it's trading at 15.5 times earnings. It was trading closer to $30 just a couple of years ago. So deep discount, growing its dividend every year for a decade. Very compelling valuation. And I would argue having Apple as your biggest customer is probably a good thing. What about emerging markets in general relative to the U.S.?

Emerging markets are deeply discounted and have been. If you go back to October of last year, that is when the dollar peaked. The dollar is down roughly 13%. Since then, Scott, you've seen the emerging markets outperform the S&P by over a thousand basis points. And I think we have a long way to go. So emerging markets valuations are back to similar levels that you saw in 2002. What's fascinating about the 2002 point is that you really needed a lot of dislocations to occur to get us to that valuation level. But because of the strong dollar, which was a result of the Fed jacking rates very quickly, as well as the pessimism around emerging markets in China, as well as what occurred with Russia, Taiwan, all the reasons that we've discussed previously. All of those reasons culminated

in a big dislocation in the emerging markets. And I think that it warrants attention in investors' portfolio. And no worries about a consumer slowdown at all relative to this play? Well, they just reopened. They just reopened. So they're starting to come back to life a little bit. So I think that the valuations are acceptable given some of those headwinds. And China is a complicated story, but I would argue that the second largest economy in the world warrants positioning. I mean, think about the Internet, Scott. China has over a billion users of the Internet. That's more than the U.S. and the E.U. combined. So I think there's a real story there on the consumer as they continue to

modernize that economy. Yeah, we've got a good fade going on, by the way, into the close here. Dow was up like 185, 180. Now it's up 85. NASDAQ was trying to work positive. It's negative again. There's the Dow. It's still positive, of course, but not nearly as strong as it was some 15, 20 minutes ago. Moderna has been a drag mag all day long, down three and a third percent today on that vaccine news, right? Yes, Scott. They, of course, are testing a flu vaccine using their mRNA technology. And this is one of the nearer term opportunities to bring them beyond COVID. But there's been a lot of skepticism about this program. They've kind of not managed to break out and show that it looks amazingly better than the existing flu vaccines. And today was another set of kind of just not terrible news, but not great news on it either.

The first interim look they took at their phase three trial in the Northern Hemisphere wasn't good enough and they didn't have enough cases to say, OK, this is better, so much better that we can stop now. They have to keep going with the trial in order to get the data to be able to get that efficacy look. It does look great, you know, on an immune response basis, superiority against influenza A, the most common type. But we are just going to have to wait a little longer to see these phase three results. And so that's adding to some of the skepticism that this program is really going to help bring them in a big way beyond COVID, Scott. Still have high hopes, though, Meg, right, in other areas. Enlighten us on that note.

Yeah, absolutely. So in the respiratory franchise, you know, their ultimate goal is to combine flu, RSV and COVID into a single shot. And they are looking at respiratory product sales of $8 billion to $15 billion by 2027. You know, the street points out that's a pretty wide range. And so just looking for the visibility there. Most importantly, on the near term, though, this weekend, we're going to get updated data on their personalized cancer vaccine. That's a product that they're partnered on with Merck and in December drove the stock up quite a bit. There's a lot of excitement around that. Unfortunately, it might already be baked in. So we're going to have to see what that update looks like.

That'll be a name to watch on Monday morning. All right. Good stuff. And we will do that. Meg Terrell, thank you very much for that. Bob Pisani, I mentioned a little bit of a fade as we head towards the close off of where we were, not 20 minutes or so ago. It's quite noticeable. The last 10 minutes, we had a nice little rally going. We were heading for, oh, 41-24. That would have been a new breakout. And just the last 15 minutes, we faded.

The primary problem is technology, which is down. Microsoft's down $6 right now. That's 50 points on the Dow. Sector itself is down 1%. It's the biggest decliner out of the S&P. Salesforce down $3 as well. That's going to fade. Apple's down $1.

So that's weighing on it. But I think the most important thing is tech is down, but we had great rallies going in the cyclical groups in industrials and materials. They've also come off their highs. Caterpillar was at the highs for the day, a half an hour ago, and now that's fading. We also had a great move up in consumer staple stocks like Procter & Gamble. That also is fading here late in the day. So what I think

we're getting here, Scott, is just a little bit of people lightening up. It's been a great rally. It's been two days where we've had the cyclical names move up, industrials and materials, and consumer cyclicals like home builders. Two great days. Now they're coming off. We also see some of those defensive names. Healthcare, we've seen great moves up in Procter, Kimberly-Clark, General Mills, all up. And they, too, are fading a little bit. I don't think there's any particular headlines that I saw, but that's clearly what's going on.

I'm just thinking it's trying to game out or position, at least in some respects, of tomorrow morning and CPI. What do you think as you look ahead to this critical number? The market's positioned for a benign CPI. The market wants to believe in the soft landing, and it needs to have a continuing slow decline in the CPI to support the soft landing thesis. If that's not true, then those numbers we talked about earlier on the earnings in the third and fourth quarter are way, way too high. If there is no soft landing, those numbers are totally wrong, and they're going to have to come down dramatically. So everyone is on either side of that divide.

That's why you had all those strategists out there who want to distance themselves a little bit from the soft landing thesis. Fedmins, too, tomorrow afternoon are going to be really interesting in the sense that, you know, a lot of they're obviously backward looking, but it's going to put you in the room and give you a real good idea of how intense the debate was around that last interest rate hike as we glean what is going to happen not only in May, but subsequent meetings from there. And a lot's changed since that last meeting. We also have Austin Goolsbee now sitting around. He's got his two cents in there.

We saw him today making comments on that. Duggish. Yeah, basically saying, don't necessarily count me in on another rate hike. The implication was, that's the way we read it. Yeah, because the tightening of the credit market is going to do a lot of the Fed's job for it. That's right. And he said specifically, he cited research that said 25 to 75 basis points, this banking crisis could be worth that in terms of potential rate hikes.

So he put a real number on that. And that's a pretty wide number, 25 to 75 basis points. You know, even as technology has been, you know, more disappointing of late, at least in the last, you the last few sessions or so, people aren't giving up on it. And you saw it today. As you worked your way back towards, as we're showing the XLK right now is down 1%, you worked your way back towards the flat line.

You're going to have to prove to people that this sector is way overdone for them to lose belief in it, don't you think? Look at the enormous run-up they've had in these sectors even the last month, but even the semiconductors, you know, when you get an NVIDIA up 80% or 90% and it's down 4.5%, 5% in a week, all of a sudden you start getting a lot of emails about it's breaking the trend line there. But the numbers are still way, way up, and this is still a very, very profitable sector. The other place that we need to keep an eye on, obviously, interest rates, given what's going to come tomorrow morning amid an environment that's had a more steepening yield curve, which has reinforced those recession fears.

You've got to believe that that's going to be the first place you're going to look. I know you're going to look at the futures tomorrow morning, but come CPI, you're going to look at the bond market. Right. And we want signs. Remember, we want signs of the CPI moderating, moving to the downside. If there's concerns out there about the Fed's going to be much more aggressive, those declining rates are going to change very, very quickly. It was an interesting day. I was just pulled up Laurel Pool. It gets the upgrade today. Interesting spot to get an upgrade in the current environment, Bob. It's up, you know, three and three-quarters percent still. One of many consumer discretionaries that have done really well. Mohawk is another one in that space that did really well today.

All right, good stuff. Our thanks to John Mowry. Our thanks to Bob Pizzani. That does it for us. All roads lead to CPI. Morgan Brennan and John Ford sets you up for that right now on OT.