Closing Bell - Stocks Tumble To Start Week; Key Technical Levels Amid The Damage 4/21/25

Episode Date: April 21, 2025

Stocks closed well off worst levels, but the rout in April continues. A deepening market selloff takes center stage with Anastasia Amoroso of iCapital and Sameer Samana of Wells Fargo breaking down pressure points across sectors. Our Deirdre Bosa reports on the unraveling of AI optimism. Morgan Stanley’s Seth Carpenter weighs in on Trump vs. Powell tensions and macro dynamics, while Citi’s Scott Chronert discusses the implications of today’s sharp drop—and the situation he says you should be buying right now. Technical analysis from Katie Stockton provides levels to watch, and Steve Kovach covers Apple’s decline on renewed China and tariff concerns. Earnings from Zions Bancorp and Western Alliance with Baird’s David George.

That marks the end of regulation. US global investors reading the closing bell of the New York Stock Exchange. DT Cloudstar Acquisition Corporation doing the honors at the NASDAQ and could have been worse. Stocks bouncing off near lows in the last hour with the Dow closing down,

looks like fewer than 1,000 points as President Trump ramps up pressure on Fed Chair Powell with the dollar lower yields higher and MegaCap Tech seeing steep declines. That's the scorecard on Wall Street, but winners stay late. Welcome to Closing Bell Overtime. I'm John Fort with Morgan Brennan.

Well, coming up this hour, Morgan Stanley's global chief economist, Seth Carpenter joins us to talk about President Trump's war of words against Fed Chair Powell and what a change at the top of the Fed would mean for investors. Plus, City US equity strategist, Scott Cronert weighs in on the sell-off and what comes next.

And Tesla tumbling again with just 24 hours to go until earnings, we're gonna talk to former Tesla board member Steve Wesley about what's at stake in tomorrow's report. First, let's get straight to the sell-off. Joining us now is I-Capital Chief Investment Strategist Anastasia Amoroso and Wells Fargo Head of Global Equities and Real Assets, Samir Samana.

Guys, good afternoon. Anastasia, the lion's share of the S&P's drop today came right after the president's 941 a.m. Eastern Post attacking Fed chief Powell. Some market participants also have been hoping to hear about progress on trade deals. What does today's action, including the weak dollar, higher yields, tell us about investor

sentiment? Well, it's all about uncertainty. We didn't need any more uncertainty coming in today because everywhere you look, we're in the midst of the earnings season. If what you hear from companies, they don't know how to parse all this tariff uncertainty. So that's the first point. You know, the second point, now we have to be uncertain about the future of the Fed independence and so that's what the markets are parsing through. Now I will say John that it's not only that but it's also some international markets are closed today. We're still in the

earnings blackout window and you know we also have a bit of a buyer strike going on so I think it's this combination of low market depth of low liquidity and you've got this amplification of the uncertainty so that's why you get the price action that's accelerated to the downside at one point. Now I will say I don't think we quite have to say yet that the Fed is not going to be independent and the Fed share is going to be fired but having said that this standoff between the two might continue. Okay, Samir, there is a school of thought that there's a balance here for the investor class. Bad news was front-loaded with the tariffs, but good news is around the corner with tax

and regulation cuts. How if at all should investors factor in also a growth slowdown and the resulting hit to state and local revenue and the working class hardship that could result? Yeah, great question. So I guess what I would say is, you know, look, in this sea of uncertainty, let's maybe start with where the certainty does lie, right? Is we've had a VIX that's jumped north of 60.

We've had, you know, stocks above their 20 day, their 50, their 200 day at very low levels. We've had at one point a 20% decline, and we have very low levels of sentiment. What history tells us is, look, if you're thinking about, you know, one to three years out, those tend to be very good buying opportunities. The tricky part is, you know, over the next couple of quarters, we're still going to

kind of be working through, to your point, kind of, you know, tariffs and, you know, probably, you know, immigration and what they mean for economic growth. It probably does mean a soft patch. It may also possibly lay the groundwork for one additional rate cut we believe. And then you know probably you know starting around October, November the administration probably pivots to midterms and I think the market probably at that point bottoms and starts to rally. So you know you've got a few months here to kind of take

advantage of the weakness but there's no reason to rush out and buy stocks today. S&P 500 settling here it looks like $51.58, $51.50, it's one of those technical levels I think because we've been playing with it, testing it. So the fact that we settled above that perhaps maybe good from a technical standpoint, something we'll talk about later in the hour as well. But in general, we have every sector in the red today in the S&P Anastasia but it is some of those more defensive leaning sectors that continue to do better even as we do have dollar down and yields up looking across asset classes is that where you want to invest

in this market into some of these more defensive areas and if so what are we calling safe haven given some of the activity we are seeing across asset class I guess gold that's where you call a safe haven. But you know, I will say for equity investors that have to be in equities, it is all about the defensive sectors. And I don't think it's just about today. It's been about this full year. And you know, Morgan, you mentioned technicals. Technicals do not really matter this juncture until you have a positive catalyst emerge. And in fact, if you look at the technicals, you've got the 50-day moving average that's below the 200-day moving average.

Nothing good typically happens with the setup until you have a reversal of the momentum. Now, the thing is I don't see the trade deals being cut imminently and the second quarter is likely to be about companies adjusting their supply chains. One of two things is likely to happen. Either they raise prices, which squeezes consumer wallets, or they readjust their supply chains

and maybe they shoulder the cost of that, and that means margins get squeezed as well. So that's why it's really difficult to look at the cyclical sectors, and you have to look at sectors that have high domestic exposure in terms of revenues, but also their costs as well. And to your point, when you look at staples, when you look at utilities, when you look at real estate, those stand out as being most defensive from the perspective of that domestic exposure. So I would stick with those as kind of the core part of the equity portfolio.

I will say, though, just to agree with Samir here, if you take a step back and if you look at the level of bearish sentiment that we have, these periods of time I should say tended to be buying opportunities. So if we're going to muddle through the short-term pain over this coming quarter, you want to take advantage of that with the long-term time horizon if you have cash to deploy in your portfolio. Samir, do earnings estimates need to come down? You know, probably a little bit, but they have come down. And I think the tricky part is, unfortunately, a lot of estimates don't get revised until companies give you

guidance. And as we've seen recently, you've got companies basically giving, on the one hand, on the other hand, type of guidance. So I'm not sure an analyst know what to do with their estimates. So I would say they're probably a touch high, but not as high as they were a few months ago. So I guess, Anastasia, if you're dollar cost averaging,

this is the time when you need to keep dollar cost averaging, just buying a little bit of the market. Again, as you said, if you've got that cash. Right. Look, we wrote this piece a couple of weeks ago that patience is going to be required. Yes, you can step in and you can buy things on days when you really feel

this technical dislocation, but I do think that investors have to realize that this is a process. This is not a moment of adjustment. This is a period of adjustment. I think this administration is so committed to this end goal, which is on-shoring U.S. manufacturing. And if you take a step back and if you think about the short-term pain that we have to live through, if it actually results in long-term gain, which is maybe trade deals do get negotiated, maybe trade barriers do get dropped and we have investment coming into the United States, which by the way is also supported by the corporate tax cuts, not the tax cuts, but the making them permanent and also various depreciation provisions that they're working

on as well. So that's a constructive environment and investing into the United States. So if you can get through this short-term pain, I think that's what's on the other side. Okay. Anastasia Amoroso and Sameer Samana, thank you both for starting the hour with us with all the major averages starting the week lower. Well, big tech stocks getting crushed today and more cracks in the AI narrative are adding uncertainty around some of the market's most closely followed names. Deirdre Bosa joins us now with those details. Hi Dee. Hey Morgan, so first it was Microsoft pouring some cold water on the CapEx story, now it is Amazon. Two sell-side notes this morning, they say

AWS has paused some of its data center leasing discussions. If accurate, that could signal a cooldown in what has been one of the hottest and most resilient themes in tech amid all of the recent volatility, and that is AI infrastructure spending. Now, Andy Jassy, he did reiterate Amazon's CapEx plans for 2025, but if the company is slowing out its build in the near term, that could raise questions about demand and really, whether enterprise adoption is keeping pace with all the hype. Now this would also echo positioning from Microsoft that it may be digesting leasing deals. And if two of the three hyperscalers are pulling back, that could further shake confidence across the entire AI trade. And certainly we saw that play out in today's session. You had stocks in the AI power data center, semi-trades getting hit hard, not to mention the Magnificent Seven,

getting pinched by Trump's politics at home on one side. And on the other side, data centers, semi-trades, getting hit hard, not to mention the Magnificent 7, getting pinched by Trump's politics at home on one side, and on the other side, China's increasing competitiveness abroad. Now this all raises the stakes for Google's earnings on Thursday, guys, as the only hyperscaler now that hasn't really walked back or any rumors of walking back capex plants, investors are going to be watching for any kind of color commentary around that. So for context though, all of the hyperscalers are full steam ahead on an overall AI strategy. This is just a near term question of

over the next couple of quarters, are we able to forecast anything about overall demand based on the little twitches that we might be seeing in their spending? I'm glad you asked because demand is a totally different story you hear from not just the hyperscalers But the big AI players open eyes well X AI from Elon Musk They say that demand is red hot and that's why it's been sort of difficult for the market to digest the supply side the idea And that's why it's been sort of difficult for the market to digest the supply side. The idea that CapEx plans to supply the compute for more AI needed is scaled back. But again, we keep hearing sort of these noises first from Microsoft, then from Amazon.

It does sort of raise questions about that demand. They're going to say that it's hot because they want to be seen as full speed ahead on AI and that they're distributing it and that they're big players and seeing a lot of demand. But the supply side questions do sort of raise some doubts, I think. And what some say, John, you hear it as much as I do, there's no killer AI app right now.

So is that demand going to keep up? And then there's all these questions around DeepSeek, it becoming cheaper. Yes, that's going to lead to more, but do we all these questions around deep seek, right, it becoming cheaper. Yes, that's gonna lead to more, but do we need all the data centers that have been planned out? Okay, dear Drabosa, thank you. We're just getting started on overtime.

After the break, Morgan Stanley Global Chief Economist, Seth Carpenter, who previously worked at the Fed, weighs in on President Trump's spat with Chair Powell. And Fairlead's Katie Stockton's gonna join us with the technical look at the S&P 500, gold and Bitcoin after another big pullback for stocks. Overtime is back in two. Welcome back to Overtime. Zion's bank core earnings are out. Kate Rooney has those numbers. Kate? Hey, John. So it was a miss at least if you look at the EPS number for Zion in the quarter, it was $1.13.

That was a five cent miss versus what the street was looking for. It was $1.18 there. We don't have a revenue number for Zion. You've got to do some math back into that. So we're not going to report the revenue number. We've also got net interest income here. That was up about 6% in the quarter, net interest margins. 3.1%.

That was compared with 2.9% or so a year ago. Provisions for credit losses also slightly higher, 18 million compared to 13 million. Some CEO commentary here saying credit quality remained in very good shape in the quarter, but he does go on to talk a little bit about trade policy and tariffs. He does say there's a very real impact potential, he says, for negative impacts from tariff and trade policies both here and abroad we are nevertheless confident that our credit culture and practices of strong reserve positions will help them manage through some of the he calls it turbulence that might materialize in the coming quarters you can see shares down here after hours

guys back over to you all right Kate Rooney thank you shares down 3% for Zions market selling off today as President Trump ramps up his criticism of Fed Chair Powell in a Truth Social Post this morning. The president calling Powell, quote, Mr. Too late and a loser, quote, unquote, and demanding he lower interest rates now, quote, unquote. Meanwhile, Chicago Fed President Austin Goolsbee warning on CNBC this morning what could happen without Fed independence. If you look around the world the reason why in countries where there is not Fed independence or central bank independence the inflation rate is higher is because when there is interference

over the long run it's going to mean higher inflation, it's gonna mean worse growth and higher unemployment because there's just gonna be a little less willingness to step up and do the hard things when the moment is tough. Well, joining us now is Seth Carpenter. He is Morgan Stanley's chief global economist and previously worked at the Federal Reserve and it's great to have you back on overtime, Seth. I'm gonna start right there with both the commentary,

the rhetoric we've gotten from the president and also those comments on our air from Gulsby. Your thoughts on this moment, especially given the fact that technically it would take an act of Congress or maybe even, you know, decisions by a court, not the executive branch, ultimately, to fully undermine or challenge

the autonomy of the Federal Reserve. Yeah, no, there's a whole lot there to unpack. I think Austin Goolsbee's comments were important. You know, what is central bank independence for? Generally speaking, it's because there are choices that get made in the short run that are unpopular. So holding interest rates higher than otherwise in order to make sure inflation is closer to target. When things are tough and the fed is now entering into a period where things are going to be particularly tough inflation has not come down to the Fed's target. Inflation is still too high. And we have tariffs that are going in, which we know from history push up inflation first,

and then over time start to push down on economic growth. And so what's the central bank supposed to do? I think right now they're trying to balance those two competing goals. And with inflation as high as it is, we don't expect the Fed to cut at the upcoming May meeting. We don't expect the Fed to cut at the June meeting. In fact, we think the Fed might not cut at all this year because the inflation driven by those tariffs

is going to be a much bigger, clear and present danger for the central bank than the slowing growth, which as it turns out will also be caused by the tariffs. Yeah, the Fed's between a rock and a hard place here in terms of the data they do have and the path that we're on. Do you see the fed not cutting because of stagflation? What happens if we tip over into a recession? Does that change the equation? It does change the equation. I think the way I like to explain it to

our clients, the way I like to explain to folks who are interested is the feds got these two competing objectives. They want inflation to get back down to 2%. On the other hand, they want growth to be sustained. They want employment to be sustained. And so how do you balance those two? I think you have to look right now,

which of those two risks is the bigger cost, which is the bigger risk. And right now it is clearly inflation. Inflation has been above the Fed's 2% target for years now. Inflation was coming down and it sort of stalled. Tariffs are gonna push that inflation up. Whereas we came into this year with a very strong economy. The unemployment rates at 4.1, 4.0, 4.2%,

very strong labor market, very strong economy. And so with all the available data right now, it is clear inflation is the bigger risk. So the Fed doesn't wanna cut. What would make them cut? I think you'd need to see growth and employment become the bigger risk. And we think that does happen at the end of this year,

going into next year, as the tariffs hit the economy, as immigration restriction hits the economy, we think you will see growth in employment become the bigger risk, but only then, at the end of this year and later, will the Fed start to cut. Seth, with dollar weakness, higher yields, is this a sell-America trade that we're seeing or just a pocket of turbulence? What should investors watch? What should they do?

I think it's a little bit of all of that put together, and investors just have to be super careful. The correlations that you're talking about, the dollar selling off as rates sell off at the same time, that is a bit of a pullback. Now is it sell America? Is it pull away from America? I think it's premature to say that.

I think it's a rebalancing. I think it's a rebalancing. I think it's people looking for what is the fair value of all of the different assets. And it's hard. This increase in tariffs that we've seen is the biggest increase we've seen basically since Smoot-Hawley, and trying to sort out how in the current modern economy

it's all going to play out. That's just very difficult for investors. So caution is the byword. And so does this current economic situation make tax cuts easier, you think, for Congress to pull off or harder? Well, I think the Congress has a tricky situation because right now they're trying to figure out how are they even going to talk to themselves, talk to the public about how much these tax cuts cost.

They're talking about whether it should be on current law versus current policy basis. And so all of that, just trying to figure out how to frame keeping the current level of taxes unchanged, I think that shows the difficulty they're having right now, trying to on the one hand, claim some fiscal responsibility while knowing that we've got a high deficit rising debt and it's just a really difficult bind I think for the leaders in Congress. All right, Seth Carpenter, thank you.

Thank you. Well, we've got a news alert on MongoDB, shares moving lower in overtime after the company disclosed the resignation of its interim CFO, that's effective May 8th. MongoDB saying it plans to announce the appointment of a new CFO within the next 7 to 10 days. Well Tesla among the worst performers in today's broad sell off adding more pain for shareholders who've seen the stock cut in half from the highs.

Up next former Tesla board member Steve Wesley is gonna join us with a look at what's at stake when the company reports earnings just 24 hours from now. And Citi's Scott Kronert says he's bullish about putting new money to work. If your timeframe is right, he's gonna join us to explain overtime. We'll be right back.

Welcome back to Overtime. Tesla, one of the hardest hit stocks in the S&P 500 today. Some negative headlines weighing on sentiment, including reports the company is delaying the launch of its lower cost Model Y and lowering Cybertruck production. The stock also getting a price target cut at Barclays, citing weakening fundamentals.

And tomorrow, we'll get first quarter earnings right here on Overtime. Joining us now is Steve Wesley, founder and managing partner at the Wesley Group and a former Tesla board member. Steve, welcome. So, Tesla has never probably traded on its fundamentals as a car company.

So does all of this stuff matter? Or does a potential shift in Elon Musk's reputation matter more? Look, all of this matters. You can't go on forever without showing growth and profits. And look, this is a rough quarter for Tesla, and they may not have hit rock bottom yet. Big miss on deliveries, 337,000 vehicles versus an estimate of 380,000. That's a 13% decrease. It stands in stark contrast to the rest of the world.

EVs grew 29% year over year. Tesla's shrinking 13%. That's why the share price has dropped 50% from a December high of $1.5 trillion down now to just over 700 billion, it's hard to lose $800 billion in shareholder value without investors getting a little worried. Now analysts expect a flat Q1 revenues probably 21 and a half billion. That could be lower revenues for 2025. And if you want to be valued as a flashy high-tech company you need the growth to go with it punchline

Tesla used to find a new growth engine soon Well, I guess part of the reason I ask the previous question though Is there some including Dan Ives calling for Elon Musk to return his full attention to Tesla? But I imagine Tesla investors might be wondering even if he does that if People's feelings about Elon Musk himself influenced their decision to buy a Tesla to invest in the stock Are we just living in a new reality? Well, I think look for any company Tesla or otherwise you need to see how to be completely focused Tesla is facing what I call the quadruple whammy.

No new product, no date for a $30,000 Tesla. You got a polarizing brand, US sales down 13% in Europe. It's a whopping 43%. They've got huge competition from BYD and the Chinese, full self-driving is late. They've paused the rollout in China. I think they need a CEO fully focused on the company. I think if he said he was coming back, share price would go up. But Tesla's bet the farm on the robo taxi.

Right now they've got to get government approval to get that going. That's exactly where I was going to go with you, Steve. How much now hinges on robo taxis' rollout? And certainly Austin seems to be ground zero in some senses around that, especially if you have seen protests and boycotts and increased competition and some of these other things that we know are denting sales. Look, I think Austin is ground zero, but you've got to remember this. Waymo got its first regulatory approval four years ago.

That's a long time for Tesla and the others, I might add, to be playing catch up. And now Waymo already off, moving in four cities already, expanding into 10 quickly, new ones coming, Tokyo and international cities in the pipeline. So Tesla's got a lot of catching up to do. I think one of the most worrisome things for me is in China where BYD is coming out with this new really impressive $8,000 Seagull and it comes with the free eye of God self-driving. Tesla charges $8,000 for their full self-driving option in China. In China, you get the whole car and the self-driving.

So that's a lot to compete with. They have to kick it into a higher gear. How much will you be paying attention to the power piece of the business or the optimists, robots that are being developed or the AI story in general where Tesla is concerned? Let's break that into two. Look, humanoid robots are going to be an extraordinary story for the next decade. I don't think they're going to come to Tesla's rescue in the next 12 months. In energy, this is something we've been talking about for the last few years when I said Tesla's

secret weapon is their energy division. No one else really saw that as part of the picture. It's drawn from 3 billion in 2023 to over 10 billion last year. If they can keep that up, it could be part of the saving grace there. But most of the batteries in Tesla's gigaboxes that they're selling by the hundreds to utilities around the world as part of their greening effort as a global grid. A lot of those batteries are made in China and if big tariffs are slapped on those, that may give Tesla some breathing room. But both BYD and CATL, the world's two largest battery makers have said we're going to be selling our own batteries in the U.S. with our name stamped on them. We'll see how that one plays out. Okay, Steve Wesley, thank you.

Thank you. I'm gonna share the Tesla down five and a half, almost 6% today. Well, time now for a CNBC News Update with Bertha Coombs, Bertha. Hey, Morgan, Nadine Menendez was just found guilty of collecting bribes with her husband, former New Jersey Senator Robert Menendez.

On trial in New York City for her role in an alleged years-long bribery spame, she was convicted by a jury this afternoon on all 18 counts and now awaits sentencing. Her husband was found guilty and sentenced to 11 years. He is vowed to appeal. President Trump will attend the funeral for Pope Francis. In a Truth Social post in the last hour, he said that he and First Lady Melania Trump will head to Rome for the Francis. In a Truth Social post in the last hour, he said that he and First Lady Melania Trump

will head to Rome for the funeral. Earlier today, the president praised the pope, calling him a good man. And Duke basketball star Cooper Flagg has declared for the upcoming NBA draft in a social media post. The 18-year-old played just one season at Duke, and while the team lost in the final four, Flagg was named a first-team All-American and national player of the year. Many expect him to be the number one pick this June,

following in the footsteps of Jalen Rose, Carmelo Anthony, and of course, we had LeBron, who went pro right from high school and is still playing 22 years later. It's a good record. All right, Bertha Coombs, thank you. Up next, Citi's Scott Kronert on where he thinks the market heads next and why you might want to start dipping back into equities if your time frame is right. And Apple seeing another sizable pullback today.

Now down more than 25% from its highs. We're going to tell you what's behind the latest push lower when overtime comes right back. Welcome back Western Alliance earnings are out and Kate Rooney is back with those numbers. Hi Kate. Morgan hey there yeah so it was a mixed quarter for Western Alliance revenue at least was the number that came up short net revenue coming in at $778 million. That was a decrease of about 7% year over year. Missing street expectations, which were closer to $792 million.

EPS did beat by a penny. That came in at $1.79. Net interest margins, 3.47%. That did decrease from about 3.48. Total deposits were up a little more than 4% in the quarter. CEO commentary here talking about the completion of some of the balance sheet repositioning efforts. They talk about deep segment expertise and the ability to adapt quickly in what they

call an evolving macro environment. Also mentioning fortified capital and liquidity level positions. They say they're going to be able to maintain some of the business momentum and prudent credit risk management shares. You can see down more than 4% on the earnings results, down more than 20% for the year, guys. Back over to you. All right. Kate, thank you. Well, if you take a look at your screen right now,

you're going to see CNBC's newest subscription streaming product. It's called CNBC Plus. What you're experiencing is the CNBC Plus data feed. It features an enhanced data view, the latest business news headlines. You can stream over time in all of your less favorite CNBC shows anytime, anywhere, on the go, and also on demand. Well, markets kicking off the week with a broad sell-off

as investors grow concerned over tariffs and Trump's hostility towards Fed Chair Powell. Joining us now on where markets could be headed next is Citi's U.S. equity strategist Scott Cronert. Scott, it's great to have you on. And we've been teasing it so far this hour, the fact that you're actually constructive potentially on this market depending on your time frame. So break that down for me.

Right, Morgan. I think it's always about time frames when we talk about equity market calls. And our view is that we're in the throes of a massive wave of uncertainty that's hitting from all sides right now. That's been reflected in the spike in the VIX index, it's been reflected in some of our ETF indicators. All told, we think we're right in this maximum period

of uncertainty right now. But as you begin to project forward, whether it's three, six months from now, even a year from now, we think the narrative gradually shifts and we revert back to a little bit more confidence in policy dynamics and therefore fundamental opportunity ahead. And somewhere in there, in this transition phase from maximum uncertainty to lessening uncertainty to a little bit more clarity, we think sets up for higher equity prices over the next, let's call it nine to 12 months. Okay.

In the meantime, just given the continued selling, dramatic selling we have seen that's been pretty broad based. If you look at just the action in the S&P, for example, today, is this a market that is rejecting the policy push that we're getting as it currently stands? I think with both hands you can say yes, but the way I like to describe this is that when you look at what investors are discounting when they look at the equity market, you're discounting said policy, known policy, the ability of companies to execute on business

plans such that you can apply a normal valuation to earnings growth drivers and so that you can provide a valuation on what you think terminal values are going to be. A lot of that's out the door right now when you have this massive overhang of uncertainty, whether it's tariffs or other forms of it. I think all of this is wreaking havoc with investor psyche and it's playing to the obvious. Let's take, let's step to the sidelines for now, let this pass. And I think we're right, we're in the throes of that right now.

So I wonder how far we are from an early 2000s scenario where a lot of stuff moves sideways or worse for a long time, just in the sense that you talk about how your baseline scenario on tariffs wasn't nearly as rough as what we ended up getting. How rough might be the market consequences that we end up getting if we stick with some of the rougher ends of these scenarios

that the administration is putting forth? Well, so we've tried to model that in. To your point, John, we went in thinking this year we'd get somewhere around a 10% announced tariff. You negotiate down to five, that would have a percentage point or two impact in S&P earnings trajectory, and we'd go about a normal fundamental business.

When you start talking about a 20 handle as a starting point, and then negotiating down from from there you take a much bigger hatchet to our earnings growth. So we've taken our full year earnings estimate down to 255 from a previous 270. I know other street strategists have been moving that way. What that does is it gets you to a very low mid single digit growth opportunity from here and in there is when you begin to bring into question the valuations you're playing. So it all feeds to the same discussion.

You need to begin to lessen the uncertainty, whether it's through a negotiating tactic here, a compromise there. These are all the baby steps that are gonna be needed to help this market essentially and gradually find a bottom as we go through the second quarter. And how does the Fed's independence and the president's approach to that factor into the

way you're treating the market? I'm going to presume the Fed remains independent and they do their job accordingly. I think what we've learned about the Fed over the past several years is that they have very clearly been data dependent in the way they approach their actions, right? And I don't expect them to be materially different this time. Now, in terms of data dependency, where do we think economic activity is going to take us? In our base case model, we're presuming something like very slow to no growth, maybe even a two-quarter dip in real GDP numbers. And so somewhere in there, you're going to begin to get a little bit more decisive Fed

for the right reasons. I think that's coming and that kind of plays to where the street is sort of modeling Fed expectations for the better part of this year. Okay. Scott Kronert, thank you. We're going to have much more on this sell-off next, including whether the market is now flashing a major technical warning sign for investors.

And we will talk to an analyst about results from regional banks, Zions, Bank Core, and Western Alliance, both lower here in overtime after a rough day for the financial sector at large. Stay with us. Welcome back to overtime. Stocks getting crushed today in a broad based sell off with every sector closing down 1.3% or more.

Joining us now to assess the technical damage is Katie Stockton. She is founder and managing partner at Fairlead Strategies and a CNBC contributor. Katie, welcome. So the S&P closed right at this long-term support level and we are barely into earnings season. What should investors watch?

Well, of course we want to see the support level hold. The level we're watching is 51.26 and it's based on a Fibonacci retracement level. If broken, that level would then target about 4,500, again, based on those Fibonacci. So we really want to see this support level hold. And for us, that means on a consecutive weekly closing basis, we see the level intact still.

So it's not an intraday breach of support that we worry about or even an intraweek breach of support, because that can be treated as just noise. But I will say that today's action was not good. The close could have been worse, but it did take the S&P 500 down from a very brief consolidation phase from last week. And it also is generating a bearish whipsaw in the daily MACD. If we see that confirmed tomorrow, it would increase the risk of a harder retest of support. How about what we're seeing in gold, in Bitcoin, in yields? Do you look at those when you look at the likelihood that the charts are going to do something unfortunate?

Well, we do. Every morning we're checking all of the above. Bitcoin in particular, we do look at as typically a risk asset, and that's what long-term correlations suggest. But there are times, of course, at which it is more correlated to gold, and that's been topical lately, because both gold and Bitcoin are somewhat tied to the dollar. So Bitcoin did rally, got pulled away from its 50-day moving average, and is now into some resistance.

It's around $88,200 to $88,800. A breakout above that level would not only clear the 200-day, but also some resistance, and then would suggest that we get a little bit more upside follow through near term from Bitcoin, which is particularly relevant for those who are looking for a better exit. For the price of gold, of course, a very different chart, but the recent correlation has been there with Bitcoin as the dollar has weakened. And the gold chart is very strong. The uptrend still has momentum across timeframes.

And yet we have no way of deriving an upside objective based on the current trading. So the way we just kind of stay on the right side of the trend is by watching the moving averages. And for one, I like the 20 day moving average. It's pretty tight to the trend. And when it starts to roll over, we tend to see some consolidation develop. Yeah, I've seen a couple of traders today reference

that gold chart as going almost parabolic in recent trading sessions. Given the fact that whether it's gold or whether it's Bitcoin or even whether it's the SPX right now, the weakening dollar and just how quickly it's been weakening certainly seems to be impacting investor sentiment more broadly. How closely are you watching that chart? And I guess what would you need to see there- to know that that maybe this is not

turning into- an uglier situation. It is pretty wild the downside volatility from the dollar index you would expect. Something a little bit more like a grind lower but indeed it's taking up two tiers of support on the charts

of the dollar index. Does have a support on the chart. So the dollar index does have a major breakdown pending confirmation. At the same time we have some short-term counter trend signals that we are watching very closely. They're shared by the euro on the flip side to suggest that we'll see a little bit of a relief rally for the dollar. That was not happening today. It was not confirmed that signal today, but the likelihood is still there for that relief rally. It appears very overstretched to the downside in the same way that you could argue that gold appears overstretched to the upside. It's not usually recent enough to either add exposure or reduce exposure until you see those moving averages turn.

All right, Katie Stockton, always great to get your insights. Thank you. Of course. is turned. All right, Katie Stockton, always great to get your insights. Thank you. Of course. Well, the trade war keeps taking a toll on shares of Apple and another Wall Street firm is slashing its price target on the stock. We've got those details straight ahead. And what's in your wallet? Check out Capital One and Discover. Two big winners in a sea of red today after the Office of the Comptroller of the Currency granted conditional approver of their more than $35 billion merger. We'll be right back.

Welcome back. Apple shares getting crushed again today and they're now down more than roughly 14%. So far this month, Steve Kovach has the latest on what's been dragging Apple down. Steve. Hey Morgan, it's more of the same and more of that dour commentary around Apple today. The big one getting a lot of attention is from the analysts over at Moffat-Nathanson. They're piling onto their sell downgrade from back in January and lowered their price target to $141.

Those analysts are saying this morning we might see a pull forward in sales from Apple early this year as folks kind of bought ahead of the tariffs in anticipation of them hitting in April. But after that, things are going to get a little bit worse. They're saying Apple has to face the 20% fentanyl tariffs. That's what they call it at the White House against China, even if it's getting a pass for now for those products made in Vietnam and India. On top of that, there are concerns over the global economy, meaning people would have to wait longer to upgrade devices if things really take a downturn.

And then it's the same story we've been hearing pretty much all year out of Apple before those tariffs were even really in the conversation. We had Apple failing to ship the AI Siri update, which was supposed to be a catalyst for sales. And we saw iPhone sales estimates go down at many firms because of that, not to mention Huawei over in China keeps eating into Apple's market share. Look at those numbers right there. You can see it right in front of you. And one thing missing from the commentary today, at least on the bright side of things

in China, the Chinese government subsidies for electronics and the cheaper iPhone 16E model may have provided a boost. We're going to get our first real taste at how Apple's dealing with all of this next week when they report earnings on Thursday, how they're gonna respond to tariffs are gonna be the number one thing the street's gonna be paying attention to. John, I'll send it over to you.

All right, Steve, thank you. Well, two regional banks pulling back now in overtime, Zions, Bancorp, and Western Alliance, down almost six and 2 percent. We're going to talk to an analyst about those results when we come right back. Welcome back. Shares of Zions, Bancor and Western Alliance both lower here in overtime after reporting quarterly results. The regional ZTF KRE is down 16 percent so far this year,

but is coming off a strong week of gains. It's best since January. Joining us now is Bard Senior Research Analyst, David George. David, it's great to have you on. I'm actually gonna start with some of these results and how it fits into what we're hearing in general, this earnings season, specifically from Zions,

where it seems like they reiterated their credit quality and, excuse me, where they iterate reiterated their credit quality and basically said they're in very good shape and and and did reference the uncertainty of tariffs. They did good afternoon and- signs is kind of

bring up the rear- for bank earnings season for us are finishing earnings season over the next couple days I think capital one is tomorrow. After the bell but designs from our perspective Morgan had a relatively good quarter- they met our

expectations as well as the streets for what we call pre provision. Net revenues or P. P. and R. and they were in line with our number as well as other consensus. The outlook was maybe a little lighter and that's a function of just maybe

a little more subdued. Expectations Morgan around low growth as well as a little lighter outlook. As it relates to fees. But as you mentioned, credit quality was good. Expectations we think were relatively low with the stock and just over book value. And I think the 6% down reaction probably lessens quite a bit by the time we open tomorrow morning. David, are we yet seeing a clear impact or expected impact of the macro situation on the regionals? We're certainly seeing in the stocks and the first quarter numbers John have been good

Loan growth has picked up and its margins have shown improvement capital is good But as you said those numbers while very good and on an absolute basis. They're really old news and now while very good and on absolute basis they're really old news and now everyone's focused market participants are focused solely on the tariffs and the implications of those tariffs on credit qualities we go through the balance of the year we've obviously seen some gyrations John as well in the bond market and there's some implications around that so clearly the future is uncertain at the moment the stocks fortunately they're. We think it relatively discounted multiples and the risk reward trade off today looks much better actually than it did after President Trump was voted

in office, given that move in the stocks downward. With a green light happening, at least from a key regulator here in the U.S. for this Discover Capital One deal to move forward, do you expect we could see more M&A among the regional banks here, especially if we get more deregulation? Yeah, I think the hopes, Morgan, is that we do get more at bank M&A. I think that the move down in the stocks, I think potentially may curb that activity or curb the enthusiasm around bank M&A in the near term. And that's just a function of the fact that a lot of

these management teams would be unwilling. Or less likely should say to be willing to sell at these prices but- the arguments for bank M&A are clearly there. There is a need for scale- and the big banks have gotten much better on the street from a day

to day- competitive and blocking and tackling- perspective so from our standpoint- there is a very compelling argument for bank M&A we're hopeful that- we get- competitive and blocking and tackling perspective. So from our standpoint, there is a very compelling argument for bank M&A. We're hopeful that we get some clarity around tariffs, a little more clarity around deregulation and the stages that we think

for more bank M&A activity going forward. We'll look for it. David George, thank you. Thank you. Well, Morgan, I keep thinking about Katie Stockton and that long-term support level in the S&P that we are just above right now. Yeah, we're gonna keep watching that.

Meantime, we get more earnings tomorrow. Tesla here in overtime, but that's gonna do it for us here for overtime.