Closing Bell - Investors Navigate More Geopolitical Uncertainty, Broadcom Earnings 3/4/26

Episode Date: March 4, 2026

Savita Subramanian of Bank of America lays out a strategy for investors to deal with the current volatility and explains how she is positioning portfolios for the rest of the year. Earnings drive the tape with results from Okta and Broadcom. Stacy Rasgon of Bernstein reacts to Broadcom’s numbers and what they signal for AI infrastructure spending. Chris Verrone of Strategas joins to walk through the technical picture and key levels investors should watch next in several important sectors. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The bell is bringing an end to the trading day at the NYSC Pfizer CEO, Albert Borla, ringing the closing bell and at the NASDAQ. Today is IPO Virtuix doing the honors. Welcome to closing bell overtime. We're live from Studio B at the NASDAQ market site. I'm Melissa Lee along with Mike Santoli. Sox rallying today, big games for technology. The NASAC up more than 1% and turning positive for the week.

More on the market straight ahead. Our reporters are covering all aspects of today's rally. Rick Santelli on the strong economic data. Amin Jabr's following developments from the White House as tensions easing, at least for now. Emily Wilkins awaiting a key vote in Congress, and we do have a couple of big earnings reports to watch this hour, Broadcom and Octa. But let's start on today's market moves with Christina Part to Neville. Christina. Well, markets really found some footing today. The VIX pulling back, oil settling

down, and it really gave investors enough of a green light to step back in. Gold, Bitcoin, both rallied crypto proxies like Coinbase and Robin Hood were among the top S&P 500 performers of the day. Chips, semiconductors, and semiconductors. software, we're both up roughly 2% today. One of the only handful of times where you can actually say that you've seen both up, a combo of that this year. Memory chips did lead the way. Micron Sandus, each up at least 5% today.

Intel closed almost 6% today, more specifically about comments from the CFO who said CPU demand is strong enough that customers are just willing to lock in long-term supply agreements. Amazon also, you talked about Mega Cap Tech before, Mike, up about 4%. investors reading that OpenAI, AWS partnership as demand validation signal for AI infrastructure, but the market, of course, had to have its losers. Consumer Staples were one of the worst performing sectors, Brown Foreman, Clorox, Campbells, all leading lower. And the Iran conflict also still an overhang for travel. Delta, United Airlines, you can see just a sea of red.

We're switching to that. And cruise operators, Carnival and Norwegian, both down more than 10% since Monday's Open, guys. All right, Christina, thank you. Christina Parts Nevelas. As you were saying before, it didn't really feel like there was high conviction. It almost felt like people were afraid that they wouldn't be positioned for bounce. Should there be some sort of a, you know, let's ease, let's back off here, let's cool down. For sure. I mean, everyone came into the week knowing that ultimately these geopolitical shocks tend to be a buying opportunity. We almost didn't allow the dip to happen. Yesterday, very briefly went below, you know, the December lows in the S&P 500. It's really acted as a prompt for radical repositioning within the market. Anything that was a winner all year has really gotten hurt.

Stocks outside the U.S., down 4% weak to date, S&P 500 flat. That's a complete reversal of what we've seen. So you've seen software over semis. You've seen Bitcoin rallying gold do not much of anything. But I do think it's worth a reminder that the market is now pretty much priced for a pretty benign outcome here. Right? Crude can't really go wild to the upside at this point. point, the VIX did come down, but it's still at 21. So we're apprehensive, but I think

open-minded to the idea that maybe the storm could pass. I think you've got to wonder, though, at what point is higher oil prices, and if oil prices remain sustainably high, does that then muddy sort of the inflation picture and then also the growth picture, not just in the U.S., but in particular around the world where they're more reliant on importing gas or importing crude oil, Japan, India, et cetera. Yeah, how high for how long? I mean, I think we're kind of lucky we're starting from a point where it was not really onerous in terms of overall cost. So, you know, that's worked out for now. But actually got plenty to chew on with the economy. As mentioned, we did get some data out this morning. That was contributing to some gains for stocks. So how did

that play out in the bond market with the dollar? Rick Santelli standing by in Chicago. Rick. Hi, Mike. Indeed. You know, I want to put a footnote here. The data this morning may not reflect some of the issues that have changed with the Iran conflict, but nonetheless, if you look at this morning's PMIs from ISM, 56.1 was the service sector index, and that is a strong number. Our last look was 53.8. This is the highest level since July of 22. The good news didn't end there. Price is paid, that kind of inflationary aspect embedded in these indices. That dropped from 66 to 63. That's the lightest it's been since March of last year. And how did that play into the markets? Well, as Mike pointed out, equities did better.

Interest rates were already slightly elevated and they moved a little bit higher. If you look at a two-week chart of tens, I want to draw your attention to something. You know, to me, in many ways, the anomaly is the under 4%. Now, I understand on Friday after PPI rates dropped and they came back during the conflict, but ultimately, the left side and the right side are about equal. This is exactly where we were kind of week and a half ago. And when it comes to the dollar index, the effects of the good data, well, it didn't really move much. But as you look at this chart, it's so much different than the 10-year two-week chart. We were flat, hovering right around 97.5. Now, even though we've lost some of the mojo that the dollar index gained on the conflict,

it's still retaining over half of its gains, and that's very significant. Mike, Melissa, back to you. Rick, thanks. Rick Santelli. Another factor contributing to today's rebound, the perceived cooling of tensions with Iran, but some strong language coming under this afternoon's White House briefing. Let's get to Amman Javrish for the details on that. Amen. Yeah, Melissa, the president's been meeting with tech executives over the past hour. And in the top of that briefing with executives, he gave a sort of rundown of where he sees the war in Iran right now. He rated it a 15 on a 10 scale. He said the United States is in a very strong position. But he lamented and returned to this lament that he's, given a couple times now in recent days that the U.S. and Israel have killed so many of Iran's leaders that it's not exactly clear who the United States is going to be dealing with in the aftermath of all this. Here's what he said. We're in a very strong position now, and their leadership is just rapidly going. Everybody that seems to want to be a leader, they end up dead. Now that comes as we're seeing reports around the world that we might be seeing a new Iranian

leader elected at some point, could be the son of the late Ayatollah who was killed in the strikes over the weekend. Not clear what the White House's position on that is, if that is somebody that the White House says they can work with. Caroline Levitt, White House Press Secretary, was asked about that development this afternoon, declining really to give the White House's view there, suggesting that the White House is going to continue to hold out and wait to see what the political landscape is in Iran once these major combat operations wrap up. For though, combination, combat still ongoing. We saw the news from the Pentagon this morning, guys,

that the United States Navy torpedoed and sank an Iranian warship off the coast of Sri Lanka yesterday. Back over to you. Amen, thank you. Amon Javers with the latest. Now let's turn our attention to Capitol Hill, where there will be a vote this hour on a war powers resolution. Emily Wilkins is following that.

Emily. Hey, Melissa. Well, look, the Senate is just wrapping up debate right now. they're going to start voting any minute, whether to advance a bill that would require Trump to get congressional approval before any further strikes in Iran. Look, at this point, the vote seems very likely to fail. Many Republicans and even one Democrat, they are supportive of the strikes. They don't want to put limits on President Trump, especially at this moment. Senator Todd Young, he initially actually voted to advance a war powers act on Venezuela a few

months ago. But now he plans to vote no on this Iranian War Powers Act. And he laid out his reasoning in a statement saying that an abrupt disengagement could pose increased risks to American lives and interests. I want to do my part to help this effort succeed and end Iran's reign of terror. But he also added, at the same time, the American people have questions pertaining to the nature of threats and the risks to our troops in homeland. Congress must take a more action. role in ensuring answers to those questions are clear and timely. Many senators told me after a briefing with Marco Rubio yesterday that they do not expect this war to last longer than a few weeks.

Some lawmakers are anticipating the White House to ask Congress for more funding for the war. That could be a very difficult vote to get Democrats on board with, although no request has been made yet to Congress. Guys? Yeah, Emily, I guess maybe that one, the more substantive debate that's yet to come. Thank you very much. Well, the major averages are higher after yesterday's pullback, despite ongoing tensions in the Middle East.

The consensus has been to buy the dip during geopolitical shocks. Did investors follow through this time? Is it a cause to rethink positioning for 2026? Joining us now as Bank of America Securities, head of U.S. Equity and Quantitative Strategy. Savita, Subramania, and then, Seveda, it's great to see you. You've been an advocate for this idea that the market ought to broaden out away from technology and big growth stocks.

been working extraordinarily well a year-to-date up until about a week ago. Has anything changed in terms of the recent events or the market's reaction to them? Yeah, you know, I think that, you know, things are changing around the edges. We had a geopolitical shock, obviously, and we're still sort of parsing that in terms of how it could impact the risk premium for equities, for bonds, how oil prices could potentially slow down the consumer, how oil exporting countries are, better off than oil importing countries. But beyond that, I think what we're seeing is the tide slowly going out for some of the beneficiaries

of a very low interest rate environment. So when you think about the big drops in areas like alternatives, like software, funding for areas of the market that might thrive in a low interest rate environment, but maybe not do as well in a 4% to 5% interest rate environment, I think those are the areas we still need to think about as, you know, treading cautiously. So our view is we're not in a liquidity crisis, but liquidity itself is really going from full gush last year where we had, you know, the highest number of central banks cutting rates

in a decade. We had liquidity coming from individual investors buying stocks, from institutional investors buying stocks, from the government buying stocks, from corporates buying their own shares of stocks to a slowdown in a lot of those areas. So I think what we need to focus on is an environment where the liquidity machine might not be seizing up, but it is less good. And that is starting to expose some areas of weakness. The last time I saw you, Savita, you were a fan of Staples, which has done well this year,

but it has suffered in this sort of reordering since the conflict started over the weekend. And I'm wondering if you sort of, if you're rethinking the allocation to Staples at this point? So I still think Staples looks like an interesting area of the market. But again, it depends on how long oil prices remain at these high levels, how long inflation continues to cut into the wallet of the lower to middle income consumer. I like Staples because it can benefit from a trade down in that middle income consumer feeling, less jobs secure around AI and these potential threats to white collar professional services jobs, as well as the fact that we do seem to be in a little bit of an air pocket for hiring amongst the professional services industries. Meanwhile, what I think is interesting is when you

look at the ISM services numbers, we're seeing a real pickup in demand for services, which could actually benefit wage growth in manufacturing and some of the areas of the economy where you haven't necessarily seen such strength. So I think the staples call still makes sense, along with the idea that if we're heading towards the midterm election, we think we're still going to see an administration focused on affordability, on, you know, kind of equalizing the playing field, you know, more populist policy, even cutting checks is not out of the question. So I think that we're in an environment where tax receipts, even tax changes on overtime and tips, a lot of these factors are benefits to that lower income cohort who has been struggling the most and maybe potentially

hitting staples from a demand perspective. Beyond that, I think the playbook is pretty similar to what you and I talked about a couple of months ago. I like manufacturing CapEx beneficiaries, like parts of industrials, materials, energy. I think we could see a little bit of a trade-off between stronger consumption and stronger CAP-X in the United States. And that's something we haven't seen in a very long time. So that requires a real, very, very rigorous recalibration from what's worked over the last few years or last 20 years

to what could be working over the next five to ten. Seveda, the picture you paint here with this sort of liquidity drain at the margin, you know, sort of the tailwinds fading for mega-cap growth, which drives the S&P 500, the supply demand for equities, maybe getting a little less favorable, especially when you have a few trillion dollar companies thinking they're going to come public pretty soon. Set expectations for how the overall market can perform in there, because it sounds to me like kind of a version of the early 2000s. When you're handing off from tech growth driven to more of a sort of commodity driven

and equal weight outperforming and midcaps outperforming and global versus U.S. outperforming, is that what we're in for? Something that rhymes with that. I mean, I don't think you want to be out of tech entirely because this is the engine of the future. There are tech companies that are going to win and lose. We just don't know kind of where the dust settles. So I think it might be less negative for tech companies than what we saw during the 2000 to 2003 post-tech bubble aftermath. I do think we'll see broadening.

I don't know if small caps in their entirety are going to do as well as they did coming out of the tech bubble because there were a lot of smaller companies with refinancing risk that might not do well until we get, you know, we see a Fed that is laser focused on cutting into. interest rates. So for me, the area of the market that looks the most attractive from a risk reward perspective is large cap value stocks. This is, you know, energy, big, cheaper, financials, real estate, parts of industrials, parts of consumer staples. These are companies that are generally a little bit more defensive. They can do well in an inflationary environment. They throw off capital rather than needing capital to grow. And I think that's the playing field we're going to be in

for a little while unless rates take a big nose dive down to the super low levels we've seen in the past. That's not our base case. So we're kind of sticking with this free cash flow value theme, but not necessarily in all small caps, maybe more in the healthy quality areas of that small to mid-cap spectrum. Savita, always great to see you. Thanks, Savita Supermanian. Acta earnings are out. Sima Modi's got those. Sima. Hi, Melissa, Octa reporting a five-cent quarterly beat on earnings with revenue coming in above the street at $761 million a street was looking for $749 million.

Now, the cloud security company that provides a platform for multi-factor authentication also saw subscription revenue and its backlog come in above expectations. That said, weaker than expected Q1 guide. It sees its Q1 non-gap operating margin between the 23 to 24% range. 25.9% was the estimate. Management noting we continue to take a prudent approach to forward guidance that factors in current market conditions. We're looking at the stock just down fractionally here in overtime. Mel and Mike?

Seema, thanks, Sima Modi with AQa. Do not miss an exclusive interview with AQAQA's CEO. That's tomorrow 11 a.m. Eastern time. Well, financial is the worst performing sector in the S&P 500. 500 so far this. year, but getting a bounce today, does that mean the worst is over? We'll take a look at the charts for the answers. And later, NHL Commissioner Gary Bettman will join us, still riding high from the league's post-Olympic bump. You're watching closing bell overtime, live from the NASAC market site. The same day at the NYSC, Pfizer CEO Albert Borla, ringing the closing bell and at the NASDAQ.

Today is IPO Vertuix doing the honors. Welcome to closing bell overtime. We're live from Studio B at the NASAC market site. I'm Melissa Lee, along with Mike Santoli. Talks to rallying today. Big games for technology. The like up more than 1% and turning positive for the week. More on the market straight ahead. Our reporters are covering all aspects of today's rally. Rick Santelli on the strong economic data. Amid Jabriss following developments from the White House as tensions easing, at least for now.

Emily Wilkins awaiting a key vote in Congress. And we do have a couple of big earnings reports to watch this hour, Broadcom and ACTA. But let's start on today's market moves with Christina Part to Nevelos. Christina. Well, markets really found some footing today. The VIX pulling back, oil settling down. and it really gave investors enough of a green light to step back in.

Gold, Bitcoin both rallied crypto proxies like Coinbase and Robin Hood were among the top S&P 500 performers of the day. Chips, semiconductors and software were both up roughly 2% today. One of the only handful of times where you can actually say that you've seen both up, a combo of that this year. Memory chips did lead the way. Micron Sandus each up at least 5% today. Intel closed almost 6% today.

More specifically about comments from the CFO who said CPU demand is strong enough that customers are just willing to lock in long-term supply agreements. Amazon also, you talked about mega-cap tech before, Mike, up about 4%. Investors reading that OpenAI, AWS partnership as demand validation signal for AI infrastructure. But the market, of course, had to have its losers. Consumer Staples were one of the worst performing sectors, Brown-Forman, Clorox, Campbells, all leading lower. and the Iran conflict also still an overhang for travel. Delta, United Airlines, you can see just a sea of red,

we're switching to that, and cruise operators, Carnival and Norwegian, both down more than 10% since Monday's open, guys. All right, Christina, thank you, Christina, Parts Nevelas. As you were saying before, it didn't really feel like there was high conviction. Almost felt like people were afraid

that they wouldn't be positioned for bounce should there be some sort of a, you know, let's ease, let's back off here, let's cool down. For sure. I mean, everyone came into the week knowing that ultimately these geopolitical stocks tend to be a buying opportunity. We almost didn't allow the dip to happen. Yesterday, very briefly went below, you know, the December lows in the S&P 500. It's really acted as a prompt for radical repositioning within the market.

Anything that was a winner all year has really gotten hurt. Stocks outside the U.S., down 4% week to date, S&P 500 flat. That's a complete reversal of what we've seen. So you've seen software over semis. You've seen Bitcoin rallying gold do not much of anything. But I do think it's worth a reminder that the market is now pretty much priced for a pretty benign outcome here, right? Crude can't really go wild to the upside at this point.

The VIX did come down, but it's still at 21. So we're apprehensive, but I think open-minded to the idea that maybe the storm could pass. I think you've got to wonder, though, at what point is higher oil prices and if oil prices remain sustainably high, does that then muddy sort of the inflation picture and then also So the growth picture, not just in the U.S., but in particular around the world, where they're more reliant on importing gas or importing crude oil, Japan, India, et cetera. Yeah, how high for how long? I mean, I think we're kind of lucky we're starting from a point where it was not really onerous in terms of overall costs.

So, you know, that's worked out for now. But actually got plenty to chew on with the economy. As mentioned, we did get some data out this morning. That was contributing to some gains for stock. So how did that play out in the bond market with the dollar? Rick Santelli standing by in Chicago. Rick. Hi, Mike.

Indeed. You know, I want to put a footnote here. The data this morning may not reflect some of the issues that have changed with the Iran conflict, but nonetheless, if you look at this morning's PMIs from ISM, 56.1 was the service sector index, and that is a strong number. Our last look was 53.8. This is the highest level since July of 5.5. 22. The good news didn't end there. Price is paid, that kind of inflationary aspect embedded in

these indices. That dropped from 66 to 63. That's the lightest it's been since March of last year. And how did that play into the markets? Well, as Mike pointed out, equities did better. Interest rates were already slightly elevated and they moved a little bit higher. If you look at a two-week chart of tens, I want to draw your attention to something. You know, to me, in many ways, is the under 4%. Now I understand on Friday after PPI rates dropped and they came back during the conflict, but ultimately the left side and the right side are about equal. This is exactly where we were kind of week and a half ago. And when it comes to the dollar index, the effects of the good data, well, it didn't really move much. But as you look at this chart, it's so much different than the 10-year two-week chart.

We were flat hovering right around 97 and a half. Now even though we've lost some of the the mojo that the dollar index gained on the conflict, it's still retaining over half of its gains, and that's very significant. Mike, Melissa, back to you. Rick, thanks. Rick Santelli. Another factor contributing to today's rebound, the perceived cooling of tensions with Iran, but some strong language coming under this afternoon's White House briefing.

Let's get to Amon Javers for the details on that. Amen. Yeah, Melissa, the president's been meeting with tech executives over the past hour. And in the top of that briefing with executives, he gave a sort of, sort of, rundown of where he sees the war in Iran right now. He rated it a 15 on a 10 scale. He said the United States is in a very strong position, but he lamented and returned to this lament that he's given a couple times now in recent days that the U.S. and Israel have killed so many of Iran's leaders that it's not exactly clear who the United States is going to be dealing with in the aftermath

of all this. Here's what he said. We're in a very strong position now, and their leadership is just rapidly going. Everybody that seems to want to be a leader, they end up dead. Now that comes as we're seeing reports around the world that we might be seeing a new Iranian leader elected at some point. It could be the son of the late Ayatollah who was killed in the strikes over the weekend. Not clear what the White House's position on that is. If that is somebody that the White House says they can work with, Caroline Levitt, White House press Secretary was asked about that development this afternoon, declining really to give the White House's view there, suggesting that the White House is going to continue to hold out and wait to see what

the political landscape is in Iran once these major combat operations wrap up. For now, though, combination, combat still ongoing. We saw the news from the Pentagon this morning, guys, that the United States Navy torpedoed and sank an Iranian warship off the coast of Sri Lanka yesterday. guys back over to you. Amen, thank you. Amen Javvers with the latest. Now let's turn our attention to Capitol Hill where there will be a vote this hour on a war powers resolution. Emily Wilkins is following that. Emily. Hey Melissa. Well, look, the Senate is just wrapping up debate right now. They're going to start voting any minute whether to advance a bill that would require Trump to get congressional approval before any further strikes in Iran. Look, at this point, the vote seems

very likely to fail. Many Republicans and even one Democrat, They are supportive of the strikes. They don't want to put limits on President Trump, especially at this moment. Senator Todd Young, he initially actually voted to advance a War Powers Act on Venezuela a few months ago. But now he plans to vote no on this Iranian War Powers Act. And he laid out his reasoning in a statement saying that an abrupt disengagement could pose increased risks to American lives and interests. I want to do my part to help this effort succeed and end Iran's race. of terror. But he also added, at the same time, the American people have questions pertaining

to the nature of threats and the risks to our troops in homeland. Congress must take a more active role in ensuring answers to those questions are clear and timely. Many senators told me after a briefing with Marco Rubio yesterday that they do not expect this war to last longer than a few weeks. Some lawmakers are anticipating the White House to ask Congress for more funding for the war, That could be a very difficult vote to get Democrats on board with, although no request has been made yet to Congress. Guys? Yeah, Emily, I guess maybe that one, the more substantive debate that's yet to come. Thank you very much.

Well, the major averages are higher after yesterday's pullback, despite ongoing tensions in the Middle East. The consensus has been to buy the dip during geopolitical shocks. Did investors follow through this time? Is it a cause to rethink positioning for 2026? Joining us now as Bank of America Securities, head of U.S. Equity and Quantifference. quantitative strategy. Seveda Subramania, and then Seveda, it's great to see you. You've been an advocate for this idea that the market ought to broaden out away from technology and big growth stocks, been working extraordinarily well year-to-date up until about a week ago.

Is anything changed in terms of the recent events or the market's reaction to them? Yeah, you know, I think that, you know, things are changing around the edges. We had a geopolitical shock, obviously, and we're still sort of parsing that in terms of how it. it could impact the risk premium for equities, for bonds, how oil prices could potentially slow down the consumer, how oil exporting countries are better off than oil importing countries. But beyond that, I think what we're seeing is the tide slowly going out for some of the beneficiaries of a very low interest rate environment. So when you think about the big drops in the in areas like alternatives, like software,

funding for areas of the market that might thrive in a low interest rate environment, but maybe not do as well in a 4% to 5% interest rate environment. I think those are the areas we still need to think about as treading cautiously. So our view is we're not in a liquidity crisis, but liquidity itself is really going from full gush last year where we had the highest number of central banks cutting

rates in a decade. We had liquidity coming from individual investors buying stocks, from institutional investors buying stocks, from the government buying stocks, from corporates buying their own shares of stocks to a slowdown in a lot of those areas. So I think what we need to focus on is an environment where the liquidity machine might not be seizing up, but it is less good, and that is starting to expose some areas of weakness. The last time I saw you, Seveda, you were a fan of Staples, which has done well this year, but it has suffered in this sort of reordering since the conflict started over the weekend. And I'm wondering if you sort of, if you're rethinking the allocation to Staples at this point?

So I still think Staples looks like an interesting area of the market. But again, it depends on how long oil prices remain at these high levels, how long inflation continues to cut into the wallet of the lower to middle income consumer. I like staples because it can benefit from a trade down in that middle income consumer, feeling less job secure around, you know, AI and these potential threats to white-collar professional services jobs,

as well as the fact that we do seem to be in a little bit of an air pocket for hiring amongst the professional services industries. Meanwhile, what I think is interesting, is when you look at the ISM services numbers, we're seeing a real pickup in demand for services, which could actually benefit wage growth in manufacturing and some of the areas of the economy where you haven't necessarily seen such strength. So I think the staples call still makes sense, along with the idea that if we're heading towards the midterm election, we think we're still

going to see an administration focused on affordability, on, you know, kind of equalizing the playing field, you know, more populist policy, even cutting checks is not out of the question. So I think that we're in an environment where tax receipts, even tax changes on overtime and tips. A lot of these factors are benefits to that lower income cohort who has been struggling the most. potentially hitting staples from a from a demand perspective. Beyond that, I think the playbook is pretty similar to what you and I talked about a couple of months ago. I like manufacturing CAPEX beneficiaries, like parts of industrials, materials, energy. I think we could see a little bit of a trade-off between stronger consumption and stronger CAP-X in the United

States. And that's something we haven't seen in a very long time. So that's, that requires a real, very, very rigorous recalibration from what's worked over the last few years or last 20 years to what could be working over the next five to 10. Seveda, the picture you paint here with this sort of liquidity drain at the margin, you know, sort of the tailwinds fading for mega cap growth, which drives the S&P 500. The supply demand for equities, maybe getting a little less favorable, especially when you have a few trillion-dollar companies thinking they're going to come public pretty soon. Set expectations for how the overall market can perform in there, because it sounds to me like

kind of a version of the early 2000s. When you're handing off from tech growth driven to more of a sort of commodity-driven and equal weight outperforming and mid-caps outperforming and global versus U.S. outperforming, is that what we're in for? Something that rhymes with that. I mean, I don't think you want to be out of tech entirely because this is the engine of the future. There are tech companies that are going to win and lose. We just don't know kind of where the dust settles.

So I think it might be less negative for tech companies than what we saw during the 2000 to 2003 post-tech bubble aftermath. I do think we'll see broadening. I don't know if small caps in their entirety are going to do as well as they did cover. coming out of the tech bubble because there were a lot of smaller companies with refinancing risk that might not do well until we get, you know, we see a Fed that is laser focused on cutting interest rates. So for me, the area of the market that looks the most attractive from a risk-reward perspective is large-cap value stocks. This is, you know, energy, big, cheaper, financials, real estate, parts of industrials, parts of industrials, parts of conditions,

consumers staples. These are companies that are generally a little bit more defensive. They can do well in an inflationary environment. They throw off capital rather than needing capital to grow. And I think that's the playing field we're going to be in for a little while unless rates take a big nose dive down to the super low levels we've seen in the past. That's not our base case. So we're kind of sticking with this free cash flow value theme, but not necessarily in all small caps maybe more in the healthy quality areas of that small to mid-cap spectrum. Savita, always great to see you. Thanks, Savita Supermanian. Octa earnings are out. Sima Modi's got those. Sima.

Hi, Melissa, Octa reporting a five-cent quarterly beat on earnings with revenue coming in above the street at $761 million a street was looking for $749 million. Now the cloud security company that provides a platform for multi-factor authentication also saw subscription revenue and its backlog come in above expectations. That said, weaker than expected Q1 guide. It sees its Q1 non-gap operating margin between the 23 to 24 percent range. 25.9 percent was the estimate management noting we continue to take a prudent approach to forward guidance that factors in current market conditions. We're looking at the stock just down fractionally here in overtime. Mel and Mike. Seema, thanks. Sima Modi with Afta. Do not miss an exclusive interview with AQa.

CEO. That's tomorrow 11 a.m. Eastern time. Well, financial is the worst performing sector in the S&P 500 so far this year. But getting a bounce today, does that mean the worst is over? We'll take a look at the charts for the answers. And later, NHL Commissioner Gary Bettman will join us, still riding high from the league's post-Olympic bump. You're watching closing bell over time, live from the NASAC market site. Broadcom earnings are out. Christina Parts and Levels has got those numbers. Christina. We're seeing a beat on the top and bottom line. For earnings per share, about a two-cent beat at $2. They did post record revenues of $19.31 billion. For their queue on EBITs coming in also higher,

semiconductor revenue in the quarter came in higher. Their infrastructure software fell a little bit light at $6.8 billion. The street was expecting about $7 billion. Now for the Q2 revenue guide, beating what sell side guys wanted, also beating by side expectations coming in at $22 billion. Another key metric for this company is AI revenue. So in the quarter, they booked about 8.4,

billion dollars in AI revenue. In the release, they're saying they're going to hit 10.5, 10.7, I should say, in Q2. So we're seeing some AI revenue growth. And they did also announce a new $10 billion share buyback program. You can see shares, though, really pretty much flat, not really reacting. We're going to be waiting to hear more about that AI revenue backlog. Last quarter, it fell in line. The stock dropped because it just wasn't good enough. So I guess we're going to get a lot more on the call in terms of all of this AI momentum, specifically for broad. and any type of diversification with customers as well. Guys?

All right, Christina, keep us posted. Christina Parts Nevelas, a stock flat right now. Markets have proved resilient this week with the S&B essentially flat despite the geopolitical concern. So what's holding it up and showing strength? Let's head over to the charts. Chris Verone from Stratigis joins us with some charts. He wants to show us.

Chris, walk us through. Hey, Melissa, yeah, listen, I think it's certainly been a pretty remarkable week in terms of the resiliency that the tape has exhibited. But let's start by talking about what has been most important in the United States. this market really over the last three or four months, which has been that equal weight SMP, the RSP, as they say, what we always look for in uptrens. And, you know, when you go back to basically November, this has been lower left to upper right for RSP. We look to the trailing three-month low line to be a very good area of support in bull markets. That hasn't even been tested here.

The 50-day has held thus far on the RSP. Listen, I think you can come up with an environment where over the next, you know, four, six, eight weeks, maybe RSP underperforms the big stocks. But I think ultimately the tone of this market is still for the equal weight over the big names as we look out over the next number of months. If we go to the next slide, what I think is important here for this market going forward is how the banks and how the industrials respond. There are just two really important groups. Late last week, we got a very big surge in the percent of banks making new one-month lows.

when you're in an up trend or in a bull market and you start to see that through 50, 60, 70%, you generally want to lean in and by weakness. We got that in the banks last week. And then lastly, you know, you talk about industrials, which have really hung in there. Svita was talking about these CAPEX-driven industrials, and I'm generally still very supportive here. You talk about the percent of names above the 200-day moving average within the industrials. It's something like 75, 76 percent, so you've seen no internal deterioration. It's a very important sector. I think it's still in gear.

So banks have some work to do here. We've got the oversold condition. Industrial is still in fine form. Chris, why don't you come on over here? We've got some more questions for you. What's about to me is your call for RSPs to still be good in the longer term, even though bumpy in the next few weeks. And that implies that big cap technology longer term will see a bumpy ride.

Yeah, I mean, there's been some momentum for some of the bigger stocks over the last week, Mike, as you know. I don't want to lose the plot of the movie. I think the plot of the movie is this is a market of the many is the language we've been using. And I think if you've got some consolidation in RSP, particularly on a relative basis, where, I mean, the move to start the year has been pretty epic in that regard. Let it consolidate. At best ever, I think. But I think the plot of the movie here is this is still about equal weight over big stocks

as we look out over the remainder of the first half. And we think through the year. What about some of the problem areas up to this point in the market? So that would be software. that would be private credit proxies, things like that. They've gotten some relief. It's hard to know if that's just kind of mechanical mean reversion. Yeah, I think when you look at software, say IGV as an example,

listen, it started to show some relative strength actually last week. I mean, the fever pitch of bear sentiment got us basically as loud as we've seen over the last couple of weeks. The stocks stopped breaking down, which I think is notable. I don't want to lose sight of the bigger picture. This is still a downtrend in these names, but you can get some really big tactical rallies. It's still another, I think, 10% just to get IVG back to the 50 day, maybe another 15 or 20% to get it back to where it broke down from just in January. So I think there's a tactical rally underway for IGV.

I wouldn't overstay my welcome. I would certainly cover shorts. Let's let it play out and kind of see who the relative winners start to emerge from that. Mike, what I think's more interesting here is these private capital stocks, these private credit stocks. You know, we have a rule at our shop. When you start at hate mail from the clients, you're typically on to a good idea. We published a constructive view on Apollo this morning, and the pushback from clients was pretty remarkable.

I just want to be open to a change here. I mean, this is a stock. It's already down 50%. It's on the 10-year uptrend line. There has been just this wave of bearer sentiment. If it's going to bottom, it probably happens somewhere in this 9,200 zone. So we like to ask the question, what could change, what could go right here? I think you're in the zone in a name like that where you want to think about that.

Does that imply that if there are a lot of people who are shorting Apollo and private credit? I mean, what's-down is hate mail? You know, what's funny is, you know, these names went negative in our work probably last summer. Yeah. They've been in these, you know, just overt down trends, both price and relative. And then suddenly everyone discovered the narrative two weeks ago. And I've just seen in my career when suddenly everyone agrees on the narrative, You should start thinking about actually what could change from that point forward.

And listen, there's still downtrends. They're bad charts. I get it. But you're in the zone here of apocalyptic sentiment really oversold near the upward trend line from the last 15 or 20 years. Just at least spend time thinking about what could change. Chris, great to see you. Great to see you. Great to see.

See you. All right, Broadcom reporting results moments ago. The stock slightly higher after hours. We'll get instant reaction to those numbers coming up on overtime. Welcome back to overtime Broadcom Q1 results out moments ago. The stock bouncing around after hours are right now pretty much flat. The company's topping expectations for the top and bottom lines as well as the current quarter revenue outlook. Broadcom also authorizing a $10 billion share buyback.

Let's dig into the numbers a little bit more. Joining us now, Stacey Razkin, senior research analyst at Bernstein. He has an outperform rating of $475 price target on Broadcom. Stacey, great to see you. Thanks. Not much of a reaction. You're sort of meh. But we did, we did have high expectations going in, given all the CAPEX guides higher from the hyperscalers.

Did that guidance, did it wow you in any way? No, the guidance is great. So the quarter was a modest beat and actually had a couple of $100 million upside. It's all coming from the AI business. The guide was very strong. So they guided $22 billion. It's, you know, a billion and a half, $2 billion above the street. And it looks like it's all coming from AI.

They guided, you know, AI revenues to 10.7, again, a billion and a half above where the, at least the cell-side consensus was. And I think even the margins look good. They guided for 68 percent, EBITA margin, which looks just fine to me. You have to remember, you know, we had a Nvidia report last week with a stellar report and the stock collapsed afterwards. Like at this point, maybe I'll take flat. And then we'll see what they say on the call that starts a little bit. Yeah, Stacey, a $2 billion increase in the quarterly guide for revenue for, for Broadcom is actually kind of bigger proportionally than

Nvidia's upside guide was, right, on its revenue base. So it's, you know, it's not bad. I do have the question of what is Broadcom being treated as a proxy for in particular in this whole theme? Is it basically like, okay, this is the anthropic kind of or custom chip side of things? How is it being viewed? Yeah, no, it is the custom chip.

So you have this whole like GPU versus TPU narrative going on. And for a while, that was also sort of like a Gemini versus OpenAI proxy and all this this. But they are really the custom play. They are the only ones that have really deployed custom chips in substantial volume, you know, tens of billions of dollars worth. And they are that play. And it's Google and it's meta.

And upcoming, we've got, we've got Anthropic. We've got Open AI, presumably next year when that starts to ramp. Some very sizable customers that are that are. ramping on the custom side for them, yes. All right. Stacey, going to leave it there. Thank you. Stacey Raskin.

Bernstein. Time now for Cnbcassi News Update with McKenzie Segalos. Mack. Mel, the Justice Department reportedly dropped efforts to investigate Autopenn used by former President Joe Biden. President Trump is called for a criminal investigation into his predecessor's use of auto pen to sign presidential documents, claiming that he didn't have the mental capacity to sign them.

But the New York Times reports the investigation was quietly shelved in recent months. because of concerns about sufficient evidence. The House Oversight Committee voted today to subpoena Attorney General Pam Bondi in its Jeffrey Epstein probe. Five Republicans supported Representative Nancy Mace's motion calling for a deposition into the Justice Department's handling of the investigation and release of documents

related to the late sex offender. And a new financial disclosure shows President Trump purchased between $600,000 and $1.25 million worth of Netflix debt in January, as Paramount pitched it, itself as a better buyer for Warner Brothers discovery. It was on top of the $500,000 to $1 million that he disclosed in December shortly after Netflix's now deceased deal for Warner Brothers was announced. Back to you guys. Mack, thanks, Mackenzie Secalos. A volatile week for markets but the S&B 500 basically flat from where it started the week. But under the surface, we've seen

a big rotation. We'll dig into that and what it means next on overtime. Welcome back to closing bell overtime live for the NASAC market site. higher across the board today. The S&P 500 of 3 quarters of percent down very slightly on the week. The NASDAQ today, the biggest gainer, now positive on the week. The biggest S&P 500 gainers today, including Moderna, App Loven, Coinbase, and Robin Hood. And shares of American Eagle, slightly lower after earnings, after hours, are earnings of 84 cents a share, top in the estimate of 72, narrow beat on revenue. The company's seeing a net tariff effect of $50 million in the quarter. And shares a subhub down big today. The company posting a net loss

and its only second report as a public company, revenue of $449 million falling short of the analyst's estimate. Gross sales, however, were up 6%. But if the company stripped out the effect of Taylor Swift's Ares Tour in the year ago quarter, those sales would have been up 18%. Well, Mike is taking a look at the value of growth, right, versus value versus growth. Yeah. So the story of the year to date up until the weekend was value catching up to growth. about 10 percentage point spread, Russell 2000 value overgrowth.

But on a one-year basis, you see that essentially it's just pulled even with growth. And now you've seen it slightly sort of stabilized over here. What's interesting to me is how much investors have chased this rotation. So take a look at fund flows. This is from Goldman Sachs. Six-month kind of rolling flows into value funds over-growth funds right here. Topping $100 billion cumulative over the last six months, It goes back to periods, you know, 2009.

If you stretched it further back than that, well, this is 2021, also 09, also 99. So basically, it's showing you that basically everyone has sponsored this idea that it's time for value. I just wonder if it's just a little bit too easy for right now. And maybe the pain trade would be a little bit of a retracement back toward Mag 7 type stocks since they've underperformed by so much. How stiff are the definitions of value in growth? because that has really changed over the past six months or so. It's a very good point. It's kind of one of the reasons they use Russell 1,000 instead of S&P.

But interestingly, the same stock can be in both indexes in different proportions. So it's not pure. It's definitely not pure. But what you do see is that the growth index has got so dominated by Mag 7 type stocks that it's essentially kind of that on-off trade as to whether we have a narrowing or broadening market. So at this point, what is value mostly comprised of? I mean, I think it's overrepresented in things like financials, for sure, and commodity-based type stocks, no doubt about it.

Industrials actually are kind of evenly split. They're not really just like the super cheap smokestack companies we used to think of. All right. Up next, NHL Commissioner Gary Bettman on the surge and interest in the NHL following the men's and women's hockey teams winning Olympic gold. And check out shares of Whirlpool falling for a record 14th straight session. The stock under increased pressure this week after the household to pull. client's maker cut its full-year earnings guidance on Monday as a result of last month's $1 billion equity sale.

Whirlpool shares losing a third of their value during that losing streak. Overtime, be right back. Welcome back to Overtime, a reversal of fortune for shares of Brown Forum and one of the worst performers in the S&P 500 today. The stock popping in pre-market trading after the Jack Daniels maker beat earnings expectations, but shares turning lower during the call with analysts after the company's CEO warned margin headwinds could last for two more years caused in part by higher barrel whiskey costs and a slump in used barrel sales down 6.5%. All right. The National Hockey League,

basking in the glow of the Olympics, it was the first time since 2014 that NHL players were part of the tournament, headlined by the United States winning the gold medal. For more, we are joined by NHL Commissioner Gary Bettman. He is live from Morgan Stanley's TMT conference in San Francisco. Gary, it's great to have you on. And, you know, Congrats, I guess, on all the excitement and the interest around the game in the wake of the Olympics. Have you been able to put some numbers on how much there has been increased attention and ratings or anything in the wake of that? Well, thank you. It's good to be with you, and congratulations really belongs to the women and men that played for their countries during amazing Olympic tournaments. Both tournaments on the women's side and the men's side were spectacular.

From the men's side, 35 million people roughly in North America watched the gold medal game, I think 26 million in the U.S. and 9 million in Canada. And I believe it was the highest rated, most viewed sporting event ever that started before 9 o'clock in the morning, Eastern time. So that was a little bit of an issue. People from NBC told me that if we had played in the afternoon, the rating would have probably been twice as high. From our standpoint, our ratings nationally have taken a bump of about 23%

from the games that were before the Olympic break, and we were up 29% this season to begin with nationally. There seems to be a lot of interest. We're hearing that there are a lot of, young people registering to play hockey. This may have been another special moment like 1980. It was 46 years actually to the day of the miracle in Lake Placid. And I think that helped build the infrastructure for hockey to grow, particularly in the United States. And I think we may be seeing another wave of that. Yeah. And of course, the U.S. Soviet game was not optimized for

primetime viewing either, right? It was on tape delay, as nobody remembers at that point. And for anybody doing the math, 9 million viewers in Canada is like 20% of the population, so it's pretty incredible. Has the NHL interest also remained, you know, kind of that uptick in Canada, too, obviously considering they were disappointed with the outcome? You know, they shouldn't be disappointed. Our players love to represent their countries. That's the reason that I think our best on best is the best. There's an authenticity, a passion, an intensity, an intensity, when our players get to represent their countries. Our players come from over 20 countries.

And Canada lost by a goal in overtime. They have nothing to be ashamed of. That's how they beat the US team last February and the Four Nations tournament that we put on. There, I believe, is strong interest. The game is strong, and we're seeing record attendance for the second year. Last year we set a record.

We're up over that. And there are a variety of factors that are fueling the interest. in our game, including heated rivalry, which has taken on a life of its own in terms of creating interest in hockey from people who were never fans. Did you see that coming? I mean, knowing that the series existed, it was based on a book, I mean, it came from out of Canada, but I mean, were you ready for it?

Well, actually, it came like a tsunami. It was released in the United States, I think, around Thanksgiving, and the number of immediately were striking in terms of the amount of people who were watching that and more in hockey or even sports fans who took the opportunity to want to take a look at our game. I was quoted and it's accurate as saying in December I actually binge watched it because I wanted to understand what the phenomena was and I actually had the opportunity to meet Jacob Tierney who is the showrunner. It's an amazing love story. It's very well done, a little spicy and not suitable for all audiences, but it is a phenomenon.

It sounds like a real endorsement. I mean, they could snip that off to be a commercial for HBO Max, Gary. I wanted to ask you about sports betting. Obviously, that's a factor that keeps younger fans very engaged. Young people, I think the stat is something like 20% of all high school and college boys actually gamble on a daily basis, which is a staggering STAT. What's your take on how prevalent this is, the impact it could have, and also the role of the predictions markets, which seems to be another outlet for people to bet on everything from the weather to hockey? Yeah, no, it's a great question. I, historically, going back to the original passage of

PASPA in my former professional life, had opposed legalizing sports betting. I've had to turn into one of the great contortionists once it was legalized because our fans need to have the opportunity to do what all other fans of other sports have an opportunity to do. And I also think there are benefits of using real data as opposed to the data that may be suspect so that people who do engage in sports betting feel comfortable with the integrity of what's going on. And being able to work with the sports betting companies, we're going to work with the sports betting companies,

We feel that we have good insight and good control to make sure nothing untoward is going on. Yes, we were the first sports of the major sports leagues to join up with Kalshi in Polymarket and in the contract betting business. And from our standpoint, it involves two things as to why we do it. Again, I wanted real data being used, so there was no debate about outcome. And two, we have the ability to take down any contracts that we think are inappropriate. And so that gives us a level of control that we wouldn't otherwise have if we didn't get involved.

Have you done that? Have you taken down any contracts that you didn't think were appropriate? No, no, we haven't had to, but we're monitoring it on a real-time basis. Gary, great to catch up with you. Really appreciate the time today. Great to be with you. Thank you. Cryptocurrency Exchange Cracken, scoring a major victory against traditional banks.

Up next will tell you what it is and what it means for the future of crypto firms. And as we head to break, check out some of the notable names hitting all-time highs. Raw stores following its strong earnings, Valero Energy, J.B. Hunt and Tenet Healthcare. Closing Bell overtime, live from the NASAC market site. Be back right after this. Welcome back to overtime. The crypto industry is celebrating a big win in its ongoing battle versus traditional banks. Leslie Picker explains. Hi, Leslie. Hey, Mike. Yeah, Cracken announcing this morning that it received approval for direct access to the Fed's core payment systems. This means that Cracken can settle payments directly through Fedwire without enlisting the help of a bank intermediary. This is the latest win for the crypto industry, which has been vying for access to certain privileges previously reserved for regulated lenders. The Bank Policy Institute, firewerexie. back saying that the industry is, quote, deeply concerned that the Kansas City Fed approved

Krakken's request for a so-called limited-purpose master account without finalizing a policy framework and ignoring public comment. BPI says uninsured depository institutions, aka crypto firms, present, quote, substantially greater risks to the payment system. The banks also appear to be swimming upstream on a battle over crypto firms offering rewards for stable coins. President Trump reportedly met with Coinbase CEO Brian Armstrong yesterday, and the president posted in a truth social post that the Genius Act is being threatened and undermined by the banks, and that is unacceptable, he says. Coinbase shares surging nearly 15% today, the big banks gaining slightly, guys.

We've heard JP Morgan CEO Jamie Diamond come out, Leslie, and say that they should be regulated just like banks if they're going to offer rewards. Any traction there? Yeah, that has been the big. bank perspective on this whole idea is that if something like stable coin with rewards looks a lot like deposits, which earn a little bit of interest as you hold it at a bank, then they should have the same kind of consumer protections, FDIC insurance, various anti-money laundering protections, know your customer, all of that that banks have to comply with. They basically said it should be a level playing field on that front. Leslie, thanks. Leslie Picker. Let's get you set up with

tomorrow's trade today. There are a lot of retail earnings on Taufford tomorrow. Kroger, B.J.'s, Burlington stores, and Victoria's Secret will be out all before the bell. And then after the bell, we'll break down results from Costco Gap and Marvel technology. And on the economic front, we'll get weekly jobless claims, January import prices, and fourth quarter productivity unit and labor costs as well. So a big day in the consumer read. Yeah, and it's interesting because the market has obviously had this, you know, little bit of unsettled action reacting to the geopolitical storm,

but it hasn't really been about the economic numbers or the earnings path. It's pretty much been all external stuff, price of commodity. So actually that unit labor cost and productivity numbers sometimes gets more attention now because the case for rate cuts looking ahead partially hinges on an AI productivity miracle that may or may not show up in some of the numbers just yet. Yeah, and of course it'll be very interesting to hear these retail CEOs talk about the impact of higher energy costs on the consumer, which has already been strapped. So we'll be listening keenly for them on the conference costs.

You know, Home Depot seems everyone sort of decided, Home Depot's kind of sandbagging and lowballing, but who knows? They seem to have done the math on the tax refunds, exactly how much is coming through, how much is going to pay down debt, and then, you know, a little bit of the strapped consumer on the lower end. So actually, consumer discretionary has been an area that hasn't quite cooperated with the bullish leadership, as people hoped coming into this year. Part of that's travel stocks because travel and services stocks are a big part of that. But it's something worth keeping an eye on. It's been industrials that have been mostly carrying the weight in some of the banks.

Yeah, for the market trade overall, though, I think a key will probably be the price of crude and the stability of crude prices in tomorrow's trading. I mean, that sort of was a green light for the markets to have this rest. It's a long night. And, you know, last night, you know, the rally overnight was attributed to these reports that the Iranian leadership had reached out for some kind of peace stuff. It didn't really come to anything, but it kind of doesn't matter. As long as oil doesn't go up in reaction to something, stocks can remain somewhat settled,

at least for now. That does it for overtime. Fast money begins right after this quick break.