Closing Bell - Stocks Come Roaring Back as S&P 500, Nasdaq Close at Records 4/15/26

Episode Date: April 15, 2026

Record closes for the S&P 500 and Nasdaq as stocks come roaring back from the Iran war lows. Tim Hayes of Ned Davis Research assesses the broader market setup and where risk and reward stand from here. Kristina Partsinevelos and Mackenzie Sigalos break down the latest on Broadcom and Meta and focus on the AI trade from both the platform and chipmaker angles. Netflix takes center stage ahead of earnings. Our Julia Boorstin previews what to watch while Laura Martin of Needham lays out expectations and key drivers heading into the report. Nancy Davis of Quadratic Capital explains what current volatility signals about risk appetite and positioning. Nicholas Campanella of Barclays explores how AI demand is driving utilities and power infrastructure as data center needs surge. 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 training day at the NYSC, Stag Industrial, ringing the bell, and at the NASAC, MAKO Mining, doing the honors. Welcome to closing bell over time. We are live from studio via the NASAC market site. I'm Melissa Lee, along with Mike Santoli. Stocks, mostly higher, once again today, small loss for the Dow. But here's the headline. The SNP 500 closing at a record, its first close above 7,000.

The NASAC, with its 11th update in a row, also closing at a record, first close above 24,000, much more in the market straight ahead. Also on our radar at the close, Though down today, the Dow transports also near record highs. Some are saying this is a bullish sign for the economy. We'll dig a little deeper. Plus, whether it's chips or power, AI buildout demand, remaining strong, and we'll get you ready for tomorrow's big earnings report,

which is from Netflix. So obviously follow-through. We talked about a 10-day rally yesterday. A lot of follow-up. Michael, is it convincing, though, in your view? I think it was constructive in broad outlines, mostly because the bellwether-type groups of this bull market have gotten back in gear to some degree. but, you know, again, it's not been very inclusive.

It's not really been responsive to news. It's been responsive to positioning dynamics. And so it's been a matter of people getting too negative at the lows. You had strategists downgrading their urine targets. All those things that fall into place that say the pain trade is higher. So it's in train at this point. And I do think you have to respect the 10, 11% gain in 10 days as being just not a fluke. That being said, you know, Dow's 1,600 points off its highs.

banks have done fine in response to their earnings, but they haven't exactly raced ahead. They're still below their highs. And I guess we have to ask the question if now the market is setting itself up to be vulnerable to some kind of downside surprise when it comes to oil or Iran or earnings. Yeah. What was not convincing to me, at least, was a volume picture. When you take a look at the queues in particular, it was well south of its average volume for the past 30 days. Also, within the Mag 7, we saw pretty much participation across the board, particularly in Tesla

in Microsoft, that's where you saw the conviction buying that. That's where you saw the volume above the average. And that sort of, I think it tells the story there. No, it does. And so it is grabbing for laggards. And so it's kind of a mean reversion effect as opposed to, hey, the fundamental story is changing or we have more confidence in the fundamental story. It's kind of let me buy kind of a lottery ticket, upside exposure to a comeback type move. So we'll see where it goes from there.

All right, let's get more on this record breaking day for the market. at Sima Modi, looking at some of the big movers driving stocks. Hi, Sima. Hey, Mike. Hey, Melissa. Well, the tech outperformance was really front and center today with the NASDAQ 100, seeing its 11th straight day of gains. And playing a key role in all of this was Nvidia. And witnessing its longest rally since going public in 1999.

The stock is now up about 20% this month. Tesla also playing a role, popping midday after CEO Elon Musk, posted a picture of Tesla designed microchip, shares ending higher by 7.6%. Another big winner, Microsoft, gaining over 4% today and up 10% just this week as it looks to potentially integrate open claw agents. Software as a whole tracking its third day of back-to-back gains. Barclays out with a positive note this morning on Datadog and Snowflake,

highlighting their growing list of customers beyond OpenAI, one subsector within software that did fare well. And then some individual movers like Uber surging on a report that it's investing $10 billion in robot taxis, snap cutting 16% of his workforce following, mounting pressure from an activist investor at SNAP to the growing list of companies laying off workers in due in part to AI like Oracle Block and Workday, guys. Back to you. Seema, thanks, Sima Modi. Let's turn now to the bond market following the Fed's beige book. Rick Santelli is in Chicago for us. Hey, Rick. You know, the Fed beige book really, I guess, uncertainty was the kind of watchword.

And, of course, the big story that seemed to be out there was what president said about firing Paul. And if you look at the charts here, it really doesn't seem to have moved the market much. But let's start out with interest rates in the Dow futures. I find it interesting today that if you look at the Dow futures, they definitely followed interest rates. When interest rates were going up, the Dow was going down and vice versa. And I think the reason's pretty clear. Let's look at a one-week chart of two-year and 10-year. And notice the fact that they held at very psychological levels yesterday, four-and-a-quarter for 10.

10s, 375 for twos. I think that pretty much explains the reason yields are slightly higher and basically overlooked the first two stories that I just talked about. And maybe the most important chart of all is the dollar index. That also goes back a week, but maybe the most important issue there is it's hovering basically at the lowest closing levels since the 27th. And once again, what was the 27th? That was the last day before the war started on the 28th,

and it represented cycle, low yield closes in two year and 10 year. Back to you. So, Rick, aside from just this sort of unwind dynamics of kind of giving back what was kind of added into these markets over that one month or so period, month and a half period, what else is the dollar and yields following? Is it simply that, you know, oil remains subdued and there's that mechanical effect or is it, you know, kind of fed intentions getting price back in? I think with the dollar it's partially mechanical and partially a good will trade actually, but I think that the real issue motivating all this, you're probably not going to agree with. I think it's been optimism.

I think there's investors out there that about a week and a half, two weeks ago decided that it really didn't look as bad as they were being told and that the markets, you know, even though they might be in your terms like, you know, really kind of flukeish and maybe not doing what the fundamentals say, it doesn't matter because investors understand one thing. Whether markets are acting strange against fundamentals or not, Mike, when you're right a check out of your account, you get cash. No, there's no doubt about it. I'm certainly not kind of dismissing, you know, the validity of this move.

So tracking with interest, Rick, thank you very much. So with the S&P 500 and NASDAQ notching all-time highs, how should you be thinking about allocations for the next few months? Joining us now is Tim Hayes. He's chief global investment strategist at Ned Davis research. Tim, good to see you. Obviously, kind of a quick round trip we've gotten here in the S&P 500, even better than a round trip. How are you viewing it in the context of maybe being a little bit less optimistic about the U.S.

and the global portfolio? Well, you just said it's been a round trip. And in fact, if you look at, we pay a lot of attention to earnings yields and to sentiment. and pretty much we're basically back to where we were in late February in terms of the sentiment indicators and the valuation. So, you know, it's sort of like, where do we go from here? Well, if we're going to continue higher, I think we are going to have to have a broadening out here and not to be just about the NASDAQ.

And we've gone back to having sort of a, you know, this concentration, which defined the market last year before the tech stock started to sell off and underperform. So, yeah, I'd be a little cautious right now. I don't think this is time to jump back in, like I think has been mentioned a few times. There's sort of a quick return to a lot of these stocks, but does it follow through? Does it broaden out? You know, that remains to be seen. But will we revisit the lows during the conflict, Tim?

I think that's sort of the question here for investors. We saw that sharp V bounce. Are we going to see a W or, you know, even if we see a small pullback, if we're not going to revisit the worst, maybe that's not such a bad scenario for investors? Well, yeah, that's right. Usually you do get some kind of a retest. It doesn't have to go all the way back down, but at least you do go back and sort of test the lows in some way that sort of rebuilds confidence.

And then another wave of investors comes in and say, okay, this actually market is turned around. And remember, we didn't have the kind of capitulation we had during the Liberation Day declined last year where you had this, you know, much higher VIX levels, much higher levels of pessimism. And that, you know, it was set to stage for a much better bottom. And this has been, you know, kind of a normal correction so far, and not something that usually is followed by a sustainable recovery. So, yeah.

You mentioned, Tim, obviously tracking earnings. There's been a lot of talk about how the U.S. earnings projections is a pretty supportive picture. Maybe it's a little lumpy in terms of what's delivering that growth. But how does it look globally at this point? It seems as if, you know, the oil shock and some of the other disruptions maybe are going to hit in an uneven way across the globe. Well, I think that does get back to sort of the point of sort of complacency. So now we're back to where we were. We're going into earnings season.

But, you know, one thing that has really changed over the last month is now we have oil prices up above 90. And we have, you know, the IMF's report, you know, highlighted how the inflationary pressures have come through, supply disruptions. We have a lot more risk economically and, therefore, for earnings going forward. And that's something that, you know, if the market's overly complacent, doesn't think we're going to have any threat to it. One of the developments that I'm really talked about recently has been the inverse correlation between bond yields and stock prices.

And while, you know, we have started to see inflation pick up at the headline level. I've pointed out how commodity prices tend to lead inflation, and we're likely to have more signs of inflation next month. And if the bond market starts to really reflect inflation expectations picking up, well, then you have a problem for equities because you have this inverse correlation, as I think was mentioned, part of the reason stocks were able to do well recently is that bond yields backed off that allowed stocks to get going into this rally. But, you know, if that turns around, you know, that could be a real threat to this equity recovery we're seeing. Why are you overweight Europe, though, Tim, if you're concerned about sort of the lingering

impact of an energy shock? Well, one thing that you keep in mind is Europe has, we can also think about sort of growth value, and Europe tends to be more value-oriented market. And actually, it has been outperforming throughout. It's maintained an up trend. And this gets me back to why are we underweight the U.S. Well, part of the issue with the U.S. is that it's so top-heavy with tech. And now, as I mentioned, tech has helped the U.S. here recently, but it also has made the U.S. remain the most expensive market. And, you know, so if we get into a more defensive environment, when investors are going to look for, you know, those value areas and start to reduce exposure to growth.

So that should benefit Europe. All right, Tim, great to speak with you. Thank you. Tim Hayes, Ned Davis Research. The recent tech boom and 11-day winning streak for the NASAC has been fueled in part by continued AI spending. The latest example, Broadcom and Meta, announcing a deal to develop custom AI processors for more on this partnership.

Let's bring Christina Parts Nevelas and McKenzie Sigalos, maybe an ambulance passing by. Great to have you both here. Matt, give us sort of the broad outlines the importance of this. So this is meta expanding its relationship with Broadcom to produce one gigawatt worth of its new AI chips. They unveiled the designs last month. They're going to scale to multiple megawatts over the next three years. And what the signals is that meta is trying to get into the in-house silicon business. This is something that Google has been working on for 11 years with Broadcom, building out their TPU that's very popular.

And frankly, people credit Gemini rising to the top of the benchmarking test because they have this in-house competitive AI chip. Does this underscore Broadcom's sort of strength in this custom TPU market? Oh, yeah. For sure. But versus Nvidia? Like, does it make it look better than Nvidia and the sort of next leg of the AI race? I think it's a little bit difficult right now to say that you look better than Nvidia, given the moat that they have and they'll say the CUDA software and the fact that so many developers are using their products, etc.

But the fact that Broadcom just last week talked about extending its partnership with Google Anthropic, they have six major companies. You have meta in that mix now, too. And so this deal that was just announced is really an extension of that relationship. I think the biggest takeaway from last week's Google deal and this week's deal is the duration. You're seeing it extend even further into the decade. And that's a signal, right, that these companies are willing to sign on with Broadcom for a longer term. You know, Mac, to that point, the theme in the last, let's say, week or so has been, okay,

maybe we had a little bit of some misgivings about the duration of this demand, but there's simply not enough. Right? Everybody is selling you the same thing. There's not enough computing capacity. The companies are kind of spending down their expected AI budgets way in advance. And I just wonder where that takes us next when it comes to like a meta where we're not really clear what the end game is. Exactly. They're spending like a hyperscaler and they don't have the cloud business to justify it. $135 billion committed to KAPX this year. So that's going to this broadcom partnership, but also buying chips from AMD, Nvidia. They're working with ARM as well. And so the question is, to what end, to your point? And we've seen a lot of upside in terms of their ad business. And right now, that's the main ROI for all of this KAPX investment. You've got e-marketer putting out data just this week showing their clips to pass Google in its digital ad business by the end of this year, which is pretty incredible. But at this point, the other question is, if they have these in-house chips, that's powering these models. It was kind of an underwhelming release last week, their first proprietary closed model. But what that model does is it powers its AI wearables. And we're, seeing a lot of reorgs happening, reportedly some layoffs today in reality labs, potentially to make room for focusing on those AI consumer products. I mean, if there was any hope, Mike, that investors would see meta scale back. Yeah.

It's pretty much, I mean, this partnership says it is not going to happen. No, it's definitely not going to happen. We're talking about foregoing a year of earnings growth, obviously foregoing all free cash. So I do wonder if the market in the back of its mind says, yeah, sure, we don't really know how they're going to monetize it immediately, but also guess how AWS started for their own internal purposes? Right, right, right. And so, you know, there's, even if they can't directly resell it, the capacity exists.

And in this world where it's just not enough of it, maybe it retains value. And it could enhance that flywheel of the digital ad spending. I mean, if they're going to use AI to enhance all of the ads within WhatsApp and their various properties, it could result in returns. I mean, that data this week showed 26% year-over-year growth. Google's ad business staying steady at 12%. That's a pretty notable bump up. And CEO Mark Zuckerberg would credit their AI models in-house. for a lot of that monetization and optimization of their ad model.

In terms of in-house, though, Tesla had an announcement today with its own chip. That's also, oh, everybody's going to have their own chip for their AI purposes. And I'm sure Tesla will be making an announcement with more details about the Intel, right? Because you had Liputan, the CEO of Intel, shaking hands. And Tesla's CEO, more specifically with the TerraFab. So there's competition coming, but the argument from a lot of these CEOs is the pie is just getting so big. say right here we want to show you the close of regular trading Simplex trading reing the closing bell that's at the CBO in Chicago and of course that marks the end of the trading day there

although we've seen it 15 minutes ago guys good to see you thanks for coming by kensi sagalis and Christina parks up what a treat have you both on set full set yeah exactly with the big banks mostly out of the way the eyes of earning season turn on netflix reporting tomorrow right here on overtime everything you need to know before those results are released That's next. And as we head to break, take a look at shares of Live Nation. That's stock closing at session lows down more than 6%. This after a federal jury found the company illegally monopolized the ticket market for major concerts in the U.S. Closing Bell Overtime. Live from the NASAC market site is back right after this. Welcome back to Closing Bell Overtime. Shares a target continuing their strong recent run up 25% so far this year. One of the best performers in the XRT ETF. Jeffreys today is saying the market is missing. something in the company's turnaround attributing it to better traffic, but overlooking the improving margins, the stock is outperforming Walmart, which is up 12% this year. This, again,

part of that sort of catch-up trade that we've seen take hold this year. Very much so. Yeah, also a little bit of like cyclical, maybe have some brand repair going on. And you know, you could have made one of these arguments over the last couple of years about Target. It just never really caught traction at all. And I was noticing the forward P.E. is now back to 15. It's kind of like the five- and 10-year average. Can we still say it's cheap? clear, but maybe they have some tailwinds. Yeah, part of the Jeffries note, though, is sort of this mix, this change to discretionary items, which they were trying to, I mean, that was sort of their weak spot when they had that overloaded inventory back in 2021. That's when they recently had

their high, not recent, actually. And they never recovered from that. And so if they're able to just sort of change that mix a little bit, they don't need a huge traffic improvement to see that margin proof. Right, as they kind of backed away from competing with grocery with Walmart. Exactly. Well, Netflix reports after the bell tomorrow. It's first earnings since losing out on the bidding for Warner Brothers. Our Julia Borson joins us now here with what to expect. Hi, Julia. Hi, well, it's great to be here. Now, the big question for Netflix with the Warner Brothers deal behind it is how it will accelerate its growth. In this coming quarter, both revenue and earnings growth is projected at 15 percent for the first quarter. Now, that would be a deceleration from

the fourth quarter. Even more important, though, than those quarterly results is the company's guidance and commentary on three key areas. First, how much pricing power does the company, see after just rolling out price hikes? Second, what's the outlook for the ad-supported lower price plan to drive growth? And third, now that Netflix has $2.8 billion in cash from its deal breakup fee, what bold moves are the company, is the company going to make? Investors are watching sports rights, live events, and games in particular. Now, since Netflix no longer reports subscriber numbers, now it's more focused on profitability, investors are going to be focusing on its revenue per streaming hour as a sign of how its ad business is working. Shares are up about 20% since its fourth quarter

report in January. They're up 29% since its deal to Warner Brothers. It's deal to buy Warner Brothers fell through. Analysts are bullish. 74% have a buy. 25% have a hold and there is only one sell on this stock. Revenue per streaming hour, RPSH, I guess. I think there are going to be some calculations that. How do you figure out how well the apps? Ad Tier is doing. Right. And when it comes to that, I mean, what's the current thinking on whether, in fact, that has delivered on the promise? Right now, I think the thinking is it's still early days. Remember, you need to have enough content that can have ads on it. You need to have the kind of content like sports, which people must see in real time. And there's some content that they monetize better,

some content that's less valuable. And Netflix is trying to figure that out right now. They say they don't want to be in the market for general sports rights. They want big events. And that's what we've seen them do so far. Julia, thanks. Good to see you, Julie Borsden. For more on what we can expect tomorrow, let's bring in Laura Martin, analysts that need him. She's got to buy a rating on $120 price target on the stock. Laura, great to see you. Nice to see you, too. What's going to be here? Do you want Netflix to unveil a bold M&A strategy, some bold moves in order to ignite that next leg of growth? Or do you want it to just stick to its knitting? So I think one of the things that's holding the stock down from reachieving its pre-Warner Brothers bid highs is I think the Wall Street, it's a little worried that they feel they don't have a complete portfolio to grow. So I think we need to hear them say, we're not going to do anything. We have all the assets we need to sort of dominate and to compute with the Amazon and Google and like the big, basically hyperscalers, which is who they're competing with now. I think we want to make sure that they do not need other assets.

So, Laura, what is your kind of case for telling investors that the stock is on a path back to those old highs? What are they going to have to gain more conviction about? So we want to see margin expansion, which is the best way to tell that they're doing a good job of advertising, because I would say they have not done a good job with advertising to date. It's not early days. I disagree, Julian. It's like three years later. So I think they've been poor at going into the ad business.

But anyway, we want to see margin expansion. We want to see that they are increasing their guidance because they were able to raise price in March and not churn U.S. subscribers, which have an ARPU about twice other countries. And we want to see engagement lengths increasing. So I think those are the three things we want to hear them say. And this $2.8 billion, which has found money that sort of Paramount paid them to walk away from the Warner Brothers deal, you know, I think we want to see something in there that's either that sort of, you know, is consistent with the notion that they are an ongoing concern and they are like don't have to go buy another company to actually compete with these hyperscalers, which are their new competitive set, I think. Is one of the next steps, Laura, for it to start bidding in, you know, the

competitive market for sports rights? Maybe, maybe, but again, that goes to this point is their portfolio isn't enough that they really do need to be in every genre. So they got this windfall. from Paramount, but if they go more into sports, that means they're going to have to go more into sports in perpetuity, which then marks down the margins for the business structurally, I think. Are they showing a scaling effect in terms of, you know, content spend relative to subscription revenue or to streaming hours at this point, or did they still kind of raise content spend in lockstep with what their revenues

that are expected to be? So good question. I think one of the things that they've said lately is they're going to go to sort of, these big ticket items are going down to eight movies a year, which is a big, you know, cutback. So I think Wall Street does want to make sure that the return on capital on content spending stays as high because their pivot in that particular strategy suggests that the old movie strategy wasn't working. So we want to hear more about that and how they're pivoting their content spending because it is going up a billion, I think, this year compared to last year.

Got it. Lauren, we'll look out for any of that in the numbers tomorrow. Laura Martin from Needham. Thank you. It is not just big tech rallying to records. The Dow transports also flying high, though a bit down today. We'll tell you exactly what's been driving that index higher. Next on overtime. Industrial is the worst performing group today. Carrier, the worst stock in the S&P 500. Stanley Black and Decker and Deere also getting hit. The concern is around Section 232 tariffs on steel, aluminum and copper, which could result in higher prices. From industrials, let's go to another old economy sector.

And you're watching the transports. I mean, Dow theories are rejoicing around the world, but you want to... Exactly. So the Dow transports making a new high, and maybe you can be confirmed by the Dow industrials as well. Usually it's a bullish sign. There are some quirks here, though. Let's take a look at the Dow Transports, Dow 20 Transport, along with the S&P 500 transportation

ETF. Now, as you can see, for most of the last year, they're pretty close. They're kind of measuring the same thing. However, the Dow Transport's a very old index. It used to be just railroads. It's a price-weighted index. And now you see how it's lifted off and disengaged from the S&P transports, which, in fact, are still not back to their old highs.

Why is that? Well, the highest share price stock in the Dow Transport is Avis Budget, the car rental company. Take a look at that stock and how it's completely gone vertical in the last several weeks or so. this has been a mega short squeeze type of situation. There's a couple of big anchor investors, a very large short position, and there may not be enough shares to go around for the shorts to cover. So that's what's gone on right here. It's added a couple of hundred dollars, and that has been driving Dow Transport.

So it's not to say that the group has been weak outright, but it's definitely not telling you the story that some of the Dow theorists might have been insane. So they should pack their party hats away for now at least. Yeah, yeah. In terms of Avis budget, it's interesting because it sort of coincides with this resurgence in the meme trade. And we see a lot of these sort of momentum names really gaining some steam as the markets have levitated to new highs.

Completely. And Avis budget, of course, as you suggest, has kind of a meme heritage here. Because back in 2021, it was one of those companies along with Hertz that got caught up in the hole. Exactly. All right. Time now for our CNBC News update with Sima Modi. Hey, Sima. Hey, Moza, several House Democrats unveiling articles of impeachment against Defense Secretary Pete

Hegset today. The lawmakers accused Hegsteth of war crimes, abuse of power, and other serious wrongdoing. However, the resolution has little chance of going anywhere in the House while the GOP holds its narrow majority, a Pentagon spokesperson calling the move another charade to distract Americans from the department's success. The Senate this afternoon defeated another attempt at a war powers resolution to curb the president's use of military force in Iran. It is the fourth time the resolution has been defeated, but Democrats are vowing to try again. And the USS General Ford aircraft carrier just set the record for the longest carrier deployment since the Vietnam War. It has now been deployed for 10 months and extended twice. If it were to be

extended again after operations in the Caribbean, Mediterranean, and Middle East, it would make the forward's current deployment the longest since World War II. Mike, Melissa, back to you. Seema, thanks, Sima Modi. The SAB 500 closing above 7,000 today for the first time. The volatility measures are back to pre-war levels. The NASDAQ up every day in April. Our market's right to think the coast is clear. Are there other issues? Stocks might be overlooking. We'll be right back. Welcome back to closing bell overtime live from the NASDAQ market site. A record setting day on Wall Street. Let's start with the S&P 500. All-time highs intraday and at the close, also its first close above the 7,000 mark. The NASDAQ with its first close above 24,000,

on an 11-session winning streak, up 15% over that span. Beating down software names were most of the top performers in the NASDAQ 100 today, at last seen, up 10%. But even with that gain on the session that is still down 60% for the year. And some after hours news, SL Green Realty lower after reporting a net loss of $1.20 per share, Voyager Technologies higher after getting picked by NASA for an astronaut mission, and Costco raising its quarterly dividend to $1.47 per ship. Well, as you mentioned, markets seem to be back to their winning ways and treasury yields are moving higher as investors move past the conflict concerns. Is this the start of a bigger push higher for stocks? Joining us now as Quadrotic Capital Management founder and CIO, Nancy Davis.

Nancy, great to see you. It's great to see you. You know, we saw this really sharp v. bottom, basically. And I'm wondering, but part of that bottom was not a huge spike in volatility. So I'm wondering how you interpret what is going on in the markets in light of volatility remaining relatively tame throughout this conflict. Exactly, Melissa. I mean, markets are looking through all the geopolitical events. Ball is actually below where we started when the start of the Iran conflict across multiple asset classes to equities.

the rate volatility market, the only thing FX ball all or lower than where we started the conflict with Iran, the only market that's a little bit higher is oil, and it's almost retraced 80 percent, despite oil prices still being high. So the markets are looking through this and saying not a problem and are very, very rosy picture right now. So what's your assessment as to whether that means the markets are just too subdued or basically too relaxed about things? Or You know, is it telling you that maybe normalcy is bad? Well, definitely markets are very calm. But I think when implied vol is really low, you know, Melissa, as an option girl, that's

a time that you can add protection. You can add optionality to portfolios because low price of volatility means options are really cheaply priced. So I think it's a real opportunity, whether you're bullish or bearish. You can, if you're buying options, you're buying volatility. So I think it's a great time to kind of get out there and get some long ball. into portfolios. Why not? It really helps if you want to stay long.

And we've seen that sort of propensity, right, during the whole conflict to want to stay long in the portfolio and not really move too much. At the same time, are we in a, are we just in a completely different VAL regime at this point where we don't see, we're not going to see the VIX spike above 40 during, you know, heightened conflict? I mean, it's so interesting because everyone's like, is this time different? It's hard to say. I think the one thing I like to stress to investors is your bond portfolio.

actually what you need to worry about. That has, it's called prepayment risk, but if you have the Ag index, for instance, 35% of the ag is short, OTC interest rate options because homeowners are on the option or equity tranche owner is long the option, therefore owners of those mortgages and bonds are short, OTC rate ball. So I kind of feel like a lot of the focus is on the VIX because it's really easy to see, but I think the embedded volatility, you know, it's always It's always short vol in mortgages that blows up portfolios, right? So if you're a conservative investor and you're in bonds, you have to look at the index constitution because it's moved so much since the financial crisis to have this bigger weight of short OTC interest rate

VAL called prepayment risk. What would you say the landscape is in terms of, for example, Treasury, VAL, considering if you just look at the yield levels have been range bound in the 10-year or whatever yield you want talk about for a couple of years now. Does that mean that volatility is cheap or does it reflect some of the unsettled dynamics? No, absolutely. Mike, Vol is very, very cheap. In fact, interest rate volatility has fallen over 50% since Silicon Valley Bank. And Silicon Valley Bank was only in 2023. And if you think about the unknowns that we have right now, whether it's the Fed's policy, the fiscal situation, obviously all the geopolitical risks, but because of all,

has not moved and everybody is selling it right now for income, it's incredibly cheaply priced. So I think it's something to look at. So boil it down for people in home who are not necessarily following every single sentence that you heard. In terms of how you interpret volatility and the next moves in the market, what do you see? What does this mean? So definitely, interest rate volatility is something that's embedded in bond cusps. So it's really hard to see. It is an OTC market. They can pull up, you know, we have an interest rate volatility ETF that tracks it. You can see it's down quite a bit from falling volatility and also from, you know, no movement

at all in yields. That's called I-VOL, our IVOL E-E-VAL-E-F. But it is hard to see because in mortgages that embedded short-optionality, it's all embedded so you can actually see the level. Nancy, good to see you. Good to see you. Nancy Davis. A big name on Wall Street is sounding the alarm on overbuilding AI data centers. Up next, we'll discuss how that could impact utility stocks in our power grid. And as we had to break, check out some notable names hitting all-time highs today,

Interactive Brokers, Bank of New York Mellon, Northern Trust, Garmin, and Echo Star. Closing Bell overtime. Be right back. We're building data centers that are coming online in 28, 29, and 30. I happen to think we are for a variety of reasons I can go into, but just start with the most basic one. The AI technology itself is becoming so much faster. more efficient and it itself can tell a data center how to run more efficiently. I think we have to be careful about, you know, where we put the data centers, right? And I think, you know, they could be placed in the right way. And I think there's things that

can be done in the energy system to make sure that, you know, we do all that efficiently. I don't think that the data centers we're building right now are going to bust or in the too much capacity. I think you may see a shifting in terms of where these AI workloads run, but we We are looking at a ramp of which we've never seen in the past, and that's why people are having a hard time getting their heads around. Gravity must take over at some point in time. Of course it will. That was IBM Vice Chairman Gary Cohn, the ARMS CEO and Michael Dell on stage today at CNBC's Invest in America Forum, discussing the recent massive data center buildout. While there is still bullishness, there are concerns around the build, including an overbuild,

and especially the energy that it will take to power all of it. With us now is Barclays analyst Nicholas Campanella, fresh from the Barclays NextGen Conference, where this was a big theme, Nick. So, I mean, I guess start to frame it out for us here in terms of you covered the utilities, you cover a lot of the power names. What's the sense out there in terms of whether they're just building to meet demand or this is actually, you know, something that looks like it could get overdone? Great.

Well, thanks for having me. I think, you know, obviously the power sector has moved to a spot where we're doing roughly 5% long-term load or demand. That's what we call it load in the utilities for, in the utilities industry. And historically, that's been zero to 50 basis points. So the utility industry has never really had a build to this level of demand since air conditioning was invented. And I think that's why you're seeing some of the calls be made that we're almost already over-speculating. What I can tell you is that, and this is coming all the way down for the administration, customers are going to be protected the whole way through this,

and utility earnings, we think, are also going to be protected and continue to grow. So, in other words, customer prices, average people will pay the same amount for power, because we have seen power prices increase in areas, particularly, that have huge data center builds like Virginia. Absolutely. You are seeing pockets of the country that are getting more constrained. Specifically, you brought up Virginia and PJM. And that's a place where it's been really hard to introduce new build supply

with the administration and PJM are working on right now. But if I could just point you to some of the more successful frameworks, Entergy with META in Louisiana, $2.5 billion of customer benefits up front for five gigawatts of new supply, Amazon with what they're doing in Indiana, a billion dollar rate credit to customers over the course of the contract, there are win-wins on both sides. It's an interesting dynamic because even if some of the more skeptical views about long-term, you know, AI data center computing demand, don't pan out. let's say, you know, we end up with a lot of spare capacity. For the power sector, it would seem like a net win, right? You're adding capacity in a way that, you know, got paid for.

Yeah, look, and capacity is going to translate to earnings, and that's going to translate to earnings revisions for these companies. And what we think is most interesting about the power sector right now, our multiples are actually below where they were at what we would call peak AI buildout hype. And we think it's actually a really attractive place to be looking at companies such as Constellation, such as Entergy as well as Nysource. How do you think about which companies will actually benefit from this buildout? I mean, do you sort of overlay on a map?

Where is the likely build-out on data centers going to happen and who actually does business in those areas? Like, how do you figure that out? Yeah, so I think really when this really just started to happen, we were all looking for the places that were long capacity or had excess capacity to sell and a lot of land. And what that turned into was we don't want to just take capacity off the grid because that could just raise prices, right?

So what you've seen now is some states have gotten ahead of it, and they've created what's called a tariff, and it allows those data centers to essentially pay for all of the upfront costs, which otherwise would have been getting recovered from the rest of the jurisdiction. So places like Louisiana, Indiana, we're watching Wisconsin to approve a similar tariff right now. Southern Company in Georgia has been very successful in doing this. And what happens is you're actually spreading those megawatts now over a larger base. So every dollar is going over a larger base of megawatts. And it actually lowers the fixed cost for the customers. Something that, you know, I kind of have brought up since the beginning of, you know,

three and a half years ago is, and clearly it's not panned out, is if power costs are kind of the constraint for really training these models and going to the next stage and all the rest of it, why is all the innovative energy not going toward trying to work around and creating lower power ways to do all this, right? If there was a revolution in data compression that said, hey, guess what, we can do it more efficiently? Would that really change the long-term investment case for this area? Look, I think that if you were to try to pitch me that chips are going to get more efficient and inevitably use less power, which at some point technology advances right, and that will happen.

that will be a negative to this sector. But just due to the long lead times, due to the fact that the deals that are happening today are paying for earnings that are going to accrue in 28 to 2032, that's kind of locked in our view. And what's really interesting about the utility sector is we're actually trading still at a slight discount to the S&P 500. Yeah, it's kind of remarkable.

Well, Nick, thanks a lot. Thank you. Thanks for having me. All right, well, higher costs and economic uncertainty turning into a double whammy for homebuilder confidence, details and what it could mean for builder stocks straight ahead. And check out shares of Ford under pressure in after hours trading. That's after announcing its head of electric vehicles, Doug Field is leaving the company. The departure comes into Ford's ongoing EV in operations restructuring. Closingville overtime. Live from the NASDAQ market site will be right then.

As America celebrates its 250th anniversary, CNBC spotlights the leaders, driving business and the nation forward. I'm Nelson Griggs on the president of the NASDAQ Stock Exchange. I've been with NASDAQ the past 25 years, and I've had a front row seat to growth innovation across the United States of America. NASDAQ was founded in 1971 as the world's first electronic exchange, and the premise of NASDAQ was to help democratize access to capital and give the average investor access to great companies. NASDAQ sits at the center of connecting capital to opportunity. We believe every entrepreneur that has a great idea has to have capital to fuel that idea, to hire teams, to hire employees, and to bring that idea to market.

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I am so optimistic about America's economic future because if we allow entrepreneurs access to capital, get out of their way, they do amazing things. Welcome back to overtime. The homebuilders getting hit hard today after builder's sentiment fell to a seven-month low and missed Wall Street expectations. The reason prices have increased on everything and consumers are not buying because of high mortgage rates and economic uncertainty. According to the NIHB, 62% of builders reported suppliers have increased building material costs due to higher fuel prices, including gas and diesel with near-term economic risks. elevated 70% of builders reported challenges pricing homes given uncertainty about material cause. I mean, they kind of can't buy a break just given how, you know, the past few years has been this sort of halting attempts at recovery and then, of course, rates.

Especially when you factor in that the fact that they are buying down mortgages too. Oh, yes. That's just they can't, they can't get any sort of, you know, respite. Did you see the article today about the home builders and what they're doing in order to cut costs in homes? No. You cost fewer windows, thinner granite on the countertiles. I'm like fewer windows. Wow.

Make more kind of like unpleasant disposable homes. Right. Exactly. Exactly. So keep it, you know, on the cheap there. Yeah. I mean, I do think that they maybe can work around the affordability challenge in that way, in a way that existing, you know, sellers can't.

But still, it's maybe not the most pleasant way to go. Three windows, please. Yeah, right. All right. Let's get you set up with tomorrow's trade today. It'll be another big day of earnings with Travelers, U.S. VanCorp, Charles. Schwab, Abbott Labs, and PepsiCo, reporting before the bell. And then after the bell, we'll

break down results from Netflix and Alcoa. And we'll speak exclusively with Alcoa's CEO just moments after those numbers are released. And on the economic front, we'll get March industrial production and capacity utilization report as well as weekly job claims. So big, big day. It is a big day. Yeah, claims obviously really subdued. And then I guess it's also how the market sort of reacts to its own sudden comeback that we've had right now. I keep looking at all these breakdowns of sort of how extraordinary this speed of a comeback is, like coming from a three month low to an all-time high and all the rest of it. So whether that means it's a sign of just underlying strength, we had this spring-loaded move or, you know, a little bit of a too-far-too-fast

mechanism might also kick in. I mean, for so long during the conflict, we had talked about capitulation and sort of the need for the high volume, the high volatility, which never came. So we're going to look back at this and think, oh, it wasn't that after all. That's right. And I think what that really generally means is it probably kind of caps the velocity of the upside from here. It's not going to be like April 2025 where we went up 40% six months after that low. All right, well, that does it for overtime today. Fast money begins right after this quick break.