Power Lunch - Stock Sell Off Steepens 3/20/26

Episode Date: March 20, 2026

Stocks turn lower. Brent crude oil prices are higher on the week.  And what does this big options expiration day mean for markets? Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Stocks ending the week, week as the Iran war rages on. Welcome to Power Lunch, everybody. I am Brian Kelly is off today. We are down across the board. Not a lot, but we are down heading for our fourth straight week of losses. Iran and Israel exchanging more air strikes overnight. Thousands more American troops could be ready to deploy overseas. Energy prices, they continue to rise.

A small pop here, but overseas prices much higher. It's a story you may not be hearing anywhere else. plus the cutting edge of technology that some are calling the next chat GPT. We'll do a deep dive on the new AI agent generating a lot of buzz and maybe a little fear around the world. Hi, everybody. Hope you having a great Friday. Good into your week.

And by the way, a happy first day of spring. All right, lots to do. And we're going to start with that on your screen. That is the markets, the major averages on pace for their fourth straight losing week in a row. Your next guest, your first guest this hour. buying the dips despite all the geopolitical risks. He's got his year-in price target, 7,700 on the S&P 500. It's about 16% from here.

He is Tom Lee, CIO of FundStrat, CNBC contributor, and on set. We're going to ask you to graciously, if you would, stick around for a couple of different blocks because we love Tom Lee. Thanks for coming on. Yeah, glad to be here. You're not changing that 7,700? We're not. Okay, why not? Well, one, I think 7,700 was a conservative estimate to start because markets have been steadily repricing on a PE basis, and we're only assuming modest PE expansion this year to 7,700.

And as much as the war is creating obviously a huge short-term setback and a lot of uncertainty, including effects on monetary policy, ultimately wars are going to be good for the U.S. economy. and the U.S. stock market. So I think as we get towards the end of the year, the market stops thinking less about the crisis element of this and more on the opportunity. I know, and that's hard to say. It's not an endorsement, by the way, of anything. I get what your point is, because you look at history,

and there's like the old maxim. I'm going to chunk it, but it's something like you sell on the sound of trumpets and you buy on the sound of cannons, meaning when things seem the worst, is often when the market does what you least. expect it to do, correct? Yeah, that's right.

I mean, I think right now, if we asked any investor, they can list all the reasons why they're worried and what could go wrong. And that's what gets priced in very quickly. But we have to know that that's counterbalanced with opportunities have always emerged. I mean, whether when we look at the last eight major war events, the market was always bottoming very early into the conflict. I have said, nobody cares what I think, but I have said that. just given what I've done for 30 years, the markets appear, feel a little too complacent,

a little too sanguine maybe about what you just talked about. Go into that a little bit. Do you feel like people are a little bit too comfortable? It doesn't sound like you are. You sound like this is where we are and everything's fine. Well, it's a good question. I was thinking about this on the way here that we've already had a rolling bear market because last year, energy was already in a three-year bear market.

And financials had been in a downturn. The Mag 7 has been in a downturn, tech and software. That in total is like 70% of the S&P. And we know over the last few months, before even the war started, gold was going parabolic. So in some ways, I think the market was pricing in uncertainty in a geopolitical event. And I think the reason people are maybe, as you're saying, somewhat complacent. I think people have de-risk already.

How do we say they've de-risk when markets are down like four or five percent this year? And in a midterm election year, which is this year, by the way, historically, going back 100 or whatever years, the S&P tends to fall, about 15 percent once on average in a mid-term election year. We're only down five. That seems complacent to me. Yeah, it's a good point. I think we have to look at global stocks. Last year, more money was made owning emerging markets, owning gold over stocks. Emerging markets have corrected a lot more than the S&P has because the world is worried about growth. And as you worry about growth, you want to own the growth index, which is the S&P 500. We had Norges Bank, the Norwegian Investment Bank and Fund tell CNBC a couple days ago that they're allocating more of their portfolio, which they're multi-trillion dollar company. This is a huge global investor.

Higher percentage to U.S. equities. It's one company. It's a big company, but it's one company. Do you think what's happening around the world and in Middle East and Europe will encourage entice force other companies? to invest more of their capital here versus Europe or other places? To me, operationally, it makes sense. We know there's been disruption and supplies of key commodities out of the strait of Hormuz. Yes.

But the effect on the U.S. is de minimis relative to any other country. In fact, arguably, the U.S. is a net beneficiary of higher oil. How? Well, we're a net producer of higher oil. I know higher gasoline is a problem, but the U.S. is also not proportional in consumption. You know, the top 20 percent of households account for 65 percent of all spending. They're relatively able to absorb higher oil prices. And does that mean the U.S. in this wartime environment, should it have a higher multiple?

I think it should. So it makes sense that money should flow into the U.S. You know, I'm sort of the energy, one of the energy people here. I've got an energy thing that's going to be launching very soon called Power Insider, by the way. I hope everybody signs up for that. We'll be launching it very soon. I've been a little delayed last few weeks for obvious reasons. So I don't want to admit it, but it's true that energy as a proportion of the American economy is one of the least highest percentages it's been in 50 years.

that relative spending by American households. Critical for AI, critical for a lot of other things. But it sounds like you're saying that because of that and other reasons, that while higher gas prices are annoying and are going to hit a lot of people, we know that. Overall, the American consumer, the economy, GDP can withstand it. 100%. I think that's already why, as you point out, the S&P hasn't fallen as much as other equity.

markets. What then to Tom Lee, and we're going to ask you to stick around, we're not wrapping yet, but what to Tom Lee is the biggest risk then, right? Now, you're obviously bullish, so we're not saying you're saying stocks going down, but what is the biggest risk any time this year to the U.S. stock market? Well, the U.S. stock market is, of course, at risk of a cascade of negative events, right? Because that spiraling can cause financial conditions to tighten. And one, of course, as we know, private credit is simmering. And we also know that this war is not popular necessarily in the U.S. And so if the U.S., for instance, has to commit troops and then this looks... Which we may be, according to reports.

Yeah. There's a ship left San Diego. U.S.S. Boxer left San Diego. Don't know where it's going. Boxer, 2,500 potential troops? Yeah. These are things that could happen and look like they are happening. Correct. And prediction markets sort of see a war that's through June. But if it may be a war that's into 2027, then I think investors might reassess how much more risks they take off the table. But to me, when I look at sentiment and positioning and then move in the VIX, I think we've really made one important bottom. All right. Sticking by the 7700 target, we're going to ask you to stick by us. If you could just hang out? Yeah. You're not racing out here, are you? I'm not. Well, we're not going to let you leave anyway.

All right. Let's take a look at the bond market right now. Treasuries are selling off, pushing up yields on the two-year, about 388. It's up 18 basis points this week. I know basis point is one percentage points. It's not a lot, right? It's 0.18 of 1%. But that is still the biggest weekly gains this last July. The 10 years is probably what you care about. That's mortgage rates, a lot of things. That's at 4.39%. That's the highest level since last August, and the borrowing costs rise is not just here. In England, UK, 10-year yield, around 5%. That is the highest level since 2008, and that is your bond report. All right, we are just getting started. A lot more to do. Still on deck. We'll talk about some of these energy prices, energy risks. Halima Croft will join us right after the break. Talk about crude disruption and dynamics, crypto's wartime potential resilience. And if you've heard about claw-bubes,

A.I. Klaude, Maltbot, all this stuff, and you're confused. Don't worry. We have got the perfect guest to help you make sense of all of this. And be smarter. Heading into a weekend. We're back right after this. The warner-Ran wrapping up its third week. And in that period, West Texas intermediate oil is up 45 percent. Brent crude overseas is up 50 percent. And some regional markets, by the way, in the UAE or Oman, prices are at 130, 140, or 150. $50 per barrel. Investors increasingly focused on the risk of a broader supply disruption across the Gulf. The question does seem to be how long does this go on? Lima Croft, Global Head of Commodity Strategy, RBC Capital Markets, and of course,

a CNBC contributor joining us now. Tom Lee, CIO Fund Strat, is also still with us. Do we have any indication, Lima, about how long this might go on because it appears that Iran or whoever's pretending to be Iran, some regional IRCG bosses, They seem to dig in and be prepared to just launch missiles for the long haul. Thrones. I mean, the Iranians seem to be digging in, and there's no indication that they're relinquishing their control over the Strait of Hormuz. They're effectively running an easy pass system for the Strait of Hormuz.

The only ships that are getting through there are basically their ships loaded with their crew, so they're cashing in on this. We've heard reports. You know, we've had Bibi Net night out yesterday saying, saying soon you've had a variety of White House officials saying it will end soon, but nobody knows if this is going to be six weeks, six months. So this looks like it could be an extended duration event. And you mentioned the issue of ground troops.

And we are hearing that potentially the U.S. may try to occupy Karg Island, to try to incentivize the Iranians to give up control of this rate of Hormuz. That would involve some type of ground operation. If we are truly going to try to do some type of naval escort through the Strait of Hormuz, it would probably entail some ground forces along the coastline to try to deal with the drones and the missiles being fired. So it does look like this is going to be a deeper U.S. involvement before this war winds down. I know you talk to a lot of people in high positions of power. I don't want to put you on the spot, but the people I've talked to, Halima, have suggested that they're not even sure what Iran is.

The Supreme Leader's son is likely wounded, potentially severely. One thing everybody I've talked to seems to agree on, he's not the Supreme Leader. they can call them that. But a lot of these regional IRCG bosses, they've made millions, they're rich, they've got their little fiefdoms. They are going to fight to the end to protect this little thing,

whatever it is, that they have built. And it's very hard for the U.S. military as amazing and powerful as it is to do something against some guy, some warlord, if you want to call them that, with an RPG on his shoulder. Well, the IRGC can essentially operate

as non-state actors. And I think that's really important. And also, the IRGC was likely preparing for round two. Like, they understood after the 12-day war in June that the United States and Israel would likely be coming back for more. And people said that the Supreme Leader of Iran, the one that Israel is killed, was prepared to die for the cause. And so there's no indication yet that we've run through the layers of IRGC officials that can rise up once another is assassinated. So, again, their bench looks fairly deep. They are hundreds of thousands of members of the IRGC.

And the question is, like, what is the United States willingness to continue to see this through? And the problem is people keep talking about a taco trade. This is not like tariffs. Like, President Trump can't unilaterally decide that this is over. The IRGC has a say as well. So that makes us a very challenging situation for the White House. Yeah, Halima, this is Tom Lee. You know, there's a lot of folks saying that the prices that we're seeing in the Middle

you know, 100, as Brian was saying, $160 for crude. Yes, that they're going to make their way to WTI. I'd be curious, one, what you think the time frame for that is. And second, you know, is there a price that breaks demand? Because, you know, as they say that there's 100%. That's what we're all watching for, Tom. And an extended duration conflict, you then have to start thinking about, like, when does demand destruction set in?

And if you look at the prices that we're seeing for Dubai grades, for Amman grades, as you mentioned, Brian, there are 150, 160. That's probably a more accurate reflection of where we are in terms of the physical market. Now, WTI, obviously, the United States is that prolific producer, more insulated. But I also think that there is a little bit of a view that, you know, President Trump may back down. And so the question is when the market participants stop really factoring in the Greenland ask off-ramp and think about this as an extent disruption scenario. And I think that's when you start to see prices move another leg higher. Because I do think we just saw it last night.

We sold off when Prime Minister Netanyahu signaled it could be a soon end of this war. But if you look at what's happened today, no indications that were off-ramp. And the Iranians continued their attacks overnight energy infrastructure. The IEA came out today. I'm sure you saw it, Halima, and put out some comments. and a little report that basically suggested this is the greatest energy supply shock in at least 50 years. And we still aren't really, I know gas prices have gone up in America. They're annoying to a lot of people, I get it. We're not at $10 a gallon, but I think to Tom's point,

feels like we could be a few weeks away from a lot higher prices than we have now. Go into that. I mean, Brian, this is the largest supply disruption ever. And again, what I think is, holding back prices is there's a corner of the market that still believes that this has to off ramp soon, that President Trump going into midterms couldn't possibly be waging a war that would lead to significantly higher prices. So any sign of an exit ramp, there's a section of the market that will just jump on that. But once it becomes clear to market participants that this could be something that could go well into summer, I think that will change perceptions about what this disruption actually

looks like. And what's very worrying for that IEA report is how long it would take to actually get supplies back up online, even when this war ends. They said six months. Because as you know, they said six months. Six months. And again, like that to me is something that we're not really factoring in. It's not simply the fact that cargos are not moving through the straight of Hormuz. It's that effectively countries are having to shut in production because they've reached tech tops. And if we go to the gas situation, I mean, that is far more perilous. I mean, there's no, alternative supply route for Kirtari LNG. You've had that major facility, Ross Lafon, actually damaged by the strikes that we saw this week. So the gas supply situation coming out of

the Middle East also looks like a very, very serious situation for consumers in Asia and Europe. Halema Croft, RBC, capital markets. Halema, always appreciate your view. Thank you very much. Still got Tom, leave with us, Tom. So, again, 7,700 target. You say this is bad, but the market can And so saying it, you don't sound that worried about the equity markets from what Halima just talked about. Yeah. I mean, I think in the near term, it's, you know, it's still a market that's absorbing this bad news. But we know that prediction markets have been forecasting $100 oil through June. I also think one of the reasons why Brent and, let's say, the cash market haven't converged yet is there is a lot of things that could happen geopolitically.

you know, whether it's other nations joining against Iran. Which Japan agreed to help us yesterday. France has been pretty supportive. Correct. And then maybe the GCC, you know, join, and maybe that is what hastens the end of this conflict. You're talking about, yeah, Gulf Cooperation Council. Talk about Saudi Arabia. Because they're getting annoyed over there. Saudis, UAE, the Emirates, Qatar.

These were sort of loose part. A lot of them, by the way, they're in OPEC together. I've been to the meetings. They're talked. They don't agree on everything. There are mutual differences. but now these countries are getting angry, and they're starting to threaten Iran in their own way.

That's right. And so maybe that's why we're seeing the price spread with WTI and every other market. And, of course, other countries are going to potentially run out of fuel, actually, to run factories and even run flights. And so I think maybe there are other factors that could hasten into this war. All right, Tom, thank you very much.

Quick programming note, by the way, speaking of energy, Monday and Tuesday, we are going to be live at the Sierra Week Conference in Houston. We have got a great lineup for the biggest names of Energy. Where do we start? Constellation Brands. Next Era, U.S. Secretary of Energy, U.S. Secretary of the Interior. We've got the CEO of GE Vernova of NRG of many, many more. Ryan Lance, ConocoPhillips, Lorenzo Seminelli of Baker Hughes, and a number of surprises. Also, that's just TV.

We've got a number of guests, by the way, that will be going on our Power Insider. new energy launch as well. Brad Smith, Peter Orszag will be on air. We've got a very, very busy couple days ahead of us. We want to thank all the TSA workers at Newark Airport, by the way, who are showing up because we're going to be showing up this weekend and we appreciate you being there as well. Mean that. All right, on deck.

Bitcoin and Ether, they are up since the beginning of the war, but they are still off 40% for their highs of last year. Where do they go? What is behind that recent move, Tom? back to talk more on that and crypto and other things. Next. All right, welcome back to Power Lunch. It's about 2.30. So we got about 90 minutes left in the session. Remember, today is a major options expiry day. We've got six trillion notional dollars of options expiring. Index options expired at the open. But ETFs and single stock options expire at the close, meaning they're starting to get unwound or traded, bought, sold whatever now.

So we're seeing the Dow down 400. Nobody cares about the Dow. The SSB is down 1.3%. NASDAQ down 1.8%. We're also down over 2%. So we're starting to see some selling activity increase. Now, there was a headline that I want to be careful of because I don't fully understand it. I'm going to read it to you as I get it about Iraq.

Iraq is declared force majeure, meaning they can't perform the contract of delivery on all oil fields developed by foreign companies. So Iraq's one of the largest oil producers in the world more than 4 million barrels a day. Most of that goes to export. But they're declaring force majeure, meaning they can't adhere to the contract of delivery, but on oil fields developed by foreign companies.

So I don't know what that means if that's what percentage of Iraqi oil is now offline. They already had oil offline as well. So again, a headline. Let's bring up if we can, guys, the XOP. That is the oil and gas ETF because many of these oil and gas stocks here, nice work. Thank you. That is up, by the way, one and a half percent.

So the NASDAQ's down 1.8 percent. The XOP oil and gas stocks up one and a half percent. That adds to already big gains this year. And in fact, the biggest gains have actually come on the refining stocks. Dames we don't talk a lot about MPC, Marathon Petroleum, Par Pacific. Delac, PBM energy, those are the refining stocks that have all gone higher this year. We're lucky and blessed to have Tom Lee on set with us here, and we're going to talk about crypto, and we will.

But Tom, markets at session lows. So let's just, I'm just making, I'm literally just making this up as I go along. So let's just do that. Yeah. Let's free. We'll do it live. We're going to have a live conversation. Does this make you more or less interested in investing in energy?

stocks or have you been there all along or don't care? Well, you know, in early December, for our 2026 Outlook Energy was our top pick for this year. Oh, great call. Yeah. And part of it is, you know, they had been in a bear market for three years. In fact, their underperformance so severe it harkens back to the GFC. But, you know, headlines like this kind of tell us a couple of things. Like one is it kind of highlights the U.S. still benefits from some of these disruptions because, you know, you can own energy stocks. But as you're saying, you know, I'm still trying to understand exactly what today's headline, what that headline means from Iraq. Yeah, and I'm not going to lie. I don't know. Because Iraq had already been partially

offline. It's Iraq. We're not, we're dealing with a country where the communication is going to be a little less direct to say somebody's, you know, financial terminal. Yeah. Facts that or whatever it is. And it couldn't be a possible. just because all the storage is being filled up, they can actually even. So that's the next leg of the store. You're asking me a question. Off, sort of offshore storage, literally people using mostly old super tankers to store oil as like a self-storage unit. That has been a huge source of inventory.

And one reason, oil is not at 130 around the world because we can take a lot of oil off that side. I think, and we'll talk about this next week at the Sierra Week conference in Houston, I think one of the big themes of this that's going to come out, Tom, is this renewed idea of energy security in the United States and whether or not these prices and what's happening encourage, entice, coerce, force, whatever word you want to use, the chevrons and the exons of the world to rethink their capital spending plans

and invest more in American production. Absolutely. What's your take? I agree. I think, you know, the lessons of the last six years, years have been sovereign security, energy security, cybersecurity, and then onshoreing. So I think that these are all amplifying the idea that a lot of what we do in America has to be built and sourced in America as well. Because at a $100 a barrel oil, and it's not the oil company's

fault, but their prices now, it depends on where they are. Vaguely, most major oil companies are probably pulling oil out of the ground at $35 a barrel. Yeah. 30 to 40, somewhere in that range. This is huge for their free cash flow in their earnings. That's right. As long as their hedges roll off and as long as they believe it's sustained. If they're hedge, that's going to hurt the earnings in the near term.

Correct, yes. But it's also, I think, a reminder that high oil creates a huge bounty for innovation. And I think that's where America is going to excel. Like, we're going to probably see America energy intensity fall. solutions to cut our energy needs, a lot of demand for technology. I'm literally putting you entirely on the spot. We've got to go. I know producers are literally cursing my name in the back.

Do you have a view on Canada at all? Like this, my view is we've got our friends up north, a lot of energy companies there. They would like to sell us more oil as talk that maybe the Keystone XL maybe gets revived again. I mean, Canada's got to look a little more attractive. Yeah. As an import partner. That's right. and as well as Latin America.

And I think it... You've heard about this Venezuela. Yes, I have vaguely. Vaguely. But yeah, it creates, you know, this is also creating strategic logic for both sides to come together, too. Tom Lee, CIO of Fundstra.

You've been a great partner. Thank you for riding shotgun for half an hour. Literally just kind of freelances as we got some headquarter. You're staying? He's staying? Does he know that? Do you know that you're staying?

I'm finding out as live as... Kareem, does he know that he's saying? Because we're not going to like... guess we're not, we're not letting you leave, Tom Lee. I'm going to have to book a hotel, I guess. He's going to have to book around here? Yeah. Good luck. Tom Lee's going to stay with us, by the way. He just found that out, as did I. Markets are rolling. We're down about one and a half percent of the S&P 500. More Power Lunch. Next. Welcome back to Power Lunch. I'm Julia Borsden. The Justice Department is reportedly investigating

whether Colombian president Gustavo Petro has ties to drug traffickers. The New York Times reports prosecutors are looking into possible meetings with drug traffickers and whether his campaign solicited donations from them. President Trump has criticized Petro in the past, calling him a, quote, sick man. The Times reports that the investigation is in its early stages and may not result in charges. Police in Barcelona say the death of University of Alabama student Jimmy Gracie, who went missing while on vacation there, was likely an accident. The 19-year-old's body was discovered yesterday in the water near the nightclub where he was last seen early Tuesday. Gracie had been visiting friends studying abroad when he disappeared.

CBS News is shutting down its radio news service after nearly a century on the air. The announcement came as part of a new round of layoffs this morning. CBS blamed a shift in station programming strategies and challenging economic times for the move. CBS News Radio first broadcast in 1927. The service will go dark, 22nd. Power Lunch. We'll be back after this. Just joining us here, we've got a NASDAQ that is down about 2% right now. The Russell 2000, it's down 2.3%. And with this move, the Russell is now 20% or more from its high, which means technically, literally and figuratively, it is in a bare market. It's more than 20% off

its highs. The S&B down 1.5%. So big move down. We're joined by Eric Clark, CIO, at AcuVest Global Advisors. We also have Tom Lee, gracious, and unbeknownst to him still with us here, Tom, we're going to let you go after this. Do appreciate you sticking around. Seriously, thank you very much. Eric, I'm going to get to you on second. Tom has a meeting, so I'm going to finalize my question to you. Does what we're seeing in the energy market impact how the Federal Reserve perceives interest rates cut? Because Steve Leeson reported earlier that if you look out on the curve in the Fed Fund's futures into December,

it's actually very slightly predicting a rate hike, not a rate cut, and I think that's hurting the small caps. 100%. We heard it from the FOMC. They are in a very tough spot because energy is now going to unsettle markets about inflation credibility, and their only way to respond to that would be to potentially tighten. But of course, that could create more suffering for Americans, which the first, the first, Fed doesn't want to do because to solve higher energy, they're going to try to slow the economy. But it's negative for small caps. Yes, it is. If you're a small cap investor, you want lower interest rates? Yes.

We want. And lower inflation. Yes. Small caps work if we have a doveish fed, visibility on the economy, mergers activity, accelerating economy. A lot of this is in doubt, which is why small caps are, have been selling off, but they're still outperforming for the year. So I don't know if investors should give up, hopefully. just yet. Yeah, and Eric Clark of Acubes, listen, Eric, we've talked obviously a lot about the war

and energy costs and inflation as we should, and those are critically important and really scary things right now. But under the surface of that, you've got what we call private credit, these bank loans that have been rattling a lot of really, really large companies. How much, if at all, are you and your team watching that part of the market? well happy Friday even if there's a lot of doom and gloom out there i mean listen when you're managing people's money you have to watch all of these things you know there's a difference in in private credit between the best alternative asset managers and the rest of the managers you know i think it was buffett that said you know you never know who's naked until the tide goes out and when you have a

credit cycle and an economic slowdown. You start to get to see who were really good at this and who were just riding a bull of market. So that's why we, I mean, I love Blackstone. I love KKR. They are right in the heart of this thing. These things are down 30 to 40 percent. Those have typically been great times to buy those stocks, but you have to absorb a lot of headmine risk because some of the managers probably have some issues. Yeah, and I think that we don't know what's sort of behind the door kind of thing, Eric, which has really been hitting some of these names. You're thrown up, by the way, big tech is down big today. You still like the invidias, the alphabets, the Amazon's of the world.

Would you use the weakness then today in the last couple of days or weeks to add more? I absolutely would. I mean, listen, I am programmed to buy really good quality stocks on sale. And you just have to understand that right now we have a very nice. negative tape on a Friday. You know, when buyers step aside, you have options, triple-witching options, which makes even more volatility. You know, you just have to be very selective, and you have to do it in tranches. But breath has been pretty bad. We've already had a big correction under the surface of the market already. Lots of great businesses have come down 30 to 40 percent.

So now's the time you have to start picking away, but you do it slowly, patiently on these kind of ditch. But yes, high quality is the place to be in this kind of environment. Yeah, and Tom, again, I'm putting you on the spot. Thank you. We've got a huge options expiry today. We've talked about it. Eric just hit on it. We don't know what's going to happen in the last hour of trading, but assuming the selling continues, is there any way to know how much of this is options related and very short term? Because it's just that end of the month, the options month positioning? It's a triple witching, too. Six-trits. Six-trial. trillion dollars in notional options value expiring today. Yeah, I think it's the largest march ever

and the fourth largest ever. It doesn't surprise me that stocks get pinned to numbers or that there is selling into the close, but we also know, as you said, it's not only temporary, it creates a temporary bottom because next week all of this rebounds. Because the options reset? Correct. It resets. And also, let's take stocks like meta, you know, is it really 3% less valuable today because of a headline. You know, to me, that doesn't really, I can't connect how oil makes meta cheaper.

And so I think eventually investors come back and say this, it's actually a great entry point. Yeah, and that's a great point because, Eric, you know, you guys running the logo ETF and you look at some of these consumer-facing brands and Netflix's of the world, Spotify's. I mean, I find it hard to believe that people are going to cancel their Spotify account

at 19 bucks a month or Netflix at $22 a month because of the war in Iran and slightly higher gas prices, which, while painful, I don't think they're enough to change people's behavior over a couple of dollars here and there. Absolutely not. I mean, people do need to realize

that volatility is here to stay simply because the options markets have gotten too big to ignore. They are the story. And so there's a lot of mechanical volatility that gets created that has nothing to do with fundamentals like Tom said. Do you think some of that is today, Eric, this quote unquote mechanical volatility because of $6 trillion, to Tom's point, fourth biggest options expiry ever?

Absolutely. And who wins? CME, the CBO, you know, the exchanges, right? The casino always wins. So they benefit from this. We certainly own those names. And you just have, this is a good opportunity to pick away, knowing that there's mechanical volatility and you buy the companies that are down that probably shouldn't be down because

business is still fine and growing really well. Eric Clark, AccuVest, Global Advisors. Eric, we appreciate you coming on and kind of rolling with it. Tom Lee, thank you for one with the whole thing. We are going to, we're not abducting you. You're free to go. Oh, I'm free. You're free.

But we do appreciate you sticking around through a lot of volatility. It means a lot. Yeah, glad to be here. Tom, thank you. Eric, thank you very much. More power lunch. without Tom Lee, right after the break. All right, welcome back.

We are in the middle of a market sell-off right now. Stocks there are at session lows. The NASDAQ is now down over 2%. Let's talk more now about this move with Jay Woods. He is chief market strategist at Freedom Capital Markets. And Jay, I'm really glad to have you on all the time, but today in particular, because it is a triple-witching options ex-pre-day. Six trillion in notional value expiring single-stock options.

ETF options expiring into the close. How much of what we're seeing the last hour or two in market selling do you think is related to or responsible because of options? It is putting an exclamation point to a down day. We've seen Friday lows on option expirations in October and November when the S&P has bottomed as well. What you'll see now is a sell-off. Hopefully, we do get a rebound, but all these dip buyers that have been buying options thinking that the taco trade was going to come to fruition are now getting out and unwinding these trades. So there's a big exclamation point. And when you have a down

day with sizable volume, a lot of people, especially technicians, they look at this as strong information as this is a really passionate sell-off. This may be one of those times where it's overdone because people think, well, the volume is so extended that this is the panic, this is the flush-out. And I think this could be the flush out. Those lows in October and November were on Fridays as well. The biggest factor we have, boots on the ground headlines. That will change the narrative. But right now, As far as options expiration goes, it's putting an exclamation point on a very bad day in the markets. Got an S&P down 1.6% at 6503. Do we care about that 6500 level on the S&P?

Do we have to defend it? Oh, we sure do. Yeah, we cared about 6540, to be quite frank. The October and November lows. We busted through that. The 200-day moving average. That's below that. Yep, we've broken down.

So technically, we've got to see if we get confirmation over the next few days. but right now, the cell side, the bears, they're winning this race right now. We need to see if we recapture not only those October-November lows, but that 200-day moving average. Here's a fun fact, RBI, if you will, Brian. You know, we've had 28 streaks, and Lewis Specter of CMT shout-out for him for this data, 28 streaks of 200-plus days above the 200-day moving average since 1950, all right? We just broke a 214-day streak above it.

Of those prior times, 21 times, we've recaptured that average within 10 days, the biggest drawdown about 3%. So we're on the clock. We want to see if this is a flush out and we get that bounce back, recapture that 200-day moving average in the next 10 days. And then we can worry about getting back on trend, worried about the headlines. I love the data and I love the shout out to the RBI random, but interesting. But we weren't at war, I presume a lot of those other times. So we got 10 days to see if we can recapture it. What if we don't rebound and recapture that 200-day moving average, Jay? Yeah.

Well, there's always a headline behind every drop, and this one is ominous. And every time you live through it, it's ominous. We've been waiting for fear and sentiment to hit a fever pitch. The hope is that this is actually an opportunity to dip your toe in the water and buy a dip because so many people are running out the exits. And that's why the volume is going to speak to people, but it may speak the wrong language because of the options expiration. So this is a time to put money to work. Yes, it's a risky time. And technically, it's not looking good. We've broken down. But I still think we have to wait out the next few days. We are one tweet away from rallying.

Now, the biggest concern, and this is your alley, this is your wheelhouse, is higher for longer when it comes to crude. We got sad, you know, scary data in the PPI. That data is not going to get better when we go through March. So there are concerns. But I think this flush out is something that a lot of people that I've been on the sidelines have been waiting for. Now the next week, the next 10 days to me, are critical because we're through earnings season, not a lot of economic data.

So all eyes go back to oil, the straight of four moves, and what comes out of the White House. And that 200 day moving average, right, Jay? I mean, that's going to be defending that, getting back to that in 10 days. Jay Woods, really glad you were here and available today because it's a big day. We need you. Appreciate it. Thank you very much. NASDAQ down 2% right now is maybe all that option selling.

It's kicking in one hour, just over an hour to go. Power lunch. We'll be right back. Just over an hour to the close. And we have a sell off. NASDAQ composite down over 2%. NASDAQ 100 down just about the same semiconductors. a certainly a big part of the story.

Christina parts the novelist from the NASDAQ, joining us now with more on this part of the selloff. Christina. Yeah, the biggest ligards that we're seeing right now on the NASDAQ 100 are just all high beta AI and infrastructure names, just getting hit on profit-taking. It's also quadruple-witching Friday

where options and futures on stocks and indices all expired once, so that does amplify the moods. But I want to start with Constellation Energy. You can see down 9%. It is the biggest loser right now as the AI power trade is starting to unwind. There's rising yields,

forcing investors to just refocus on valuation today. Another big name, a chip name is Western Digital. That's down almost 7% after hitting all-time highs just earlier this week on AI storage optimism. So again, could be just profit-taking. Micron. Micron is really the epicenter right now. Down more than about 5%. The epicenter of like the AI buildout.

It's extending its sell-off after just yesterday, even though it had a blowout earnings report Wednesday evening, where revenue nearly triple. But the stock, though, has really run up, what, 330% into the print. The street is questioning whether AI memory margins may have peaked because the company guided to 81% for this quarter. So could be just techs put to sell the news. Another big chip name, also one of the worst performers on the NASDAQ 100, is ASML. This is the EUV maker, down about 5%.

There's no specific news, but just dragged down with semis on risk off and maybe China export control concerns. And last but not at least, crowd strike. down about 5% as software and cyber continues to lag tech, you know, still digesting that February hit from Anthropics' AI security tool, not necessarily any specific news, but those are your big laggards for today, Brian. Now, they're all big movers, and you got, I got Super Micro, the other story you're on today, I've got to imagine its own thing, but not helping. No, so that's one of the worst performers on the S&P 500.

That's why I didn't include it. But yes, and that's because they got caught, or they allegedly caught, for the same. smuggling nVIDIA chips to china yeah it's a great story we'll have in the next hour yes and in the five o'clock show which i will be hosting as well from the nzdaq well face to face well face christina thank you very much by the way constellation energy your worst performer in the nasdaq 100 right now constellation ceo joe dominguez one of the names we're going to have from our zero week conference coverage one of the biggest oil and gas conferences in the world you've also got wind and solar in there too john ketchum ceo of next area energy

one of the biggest renewables producer. Monday and Tuesday, full team lineup. Huge guests will be in Houston. Monday and Tuesday, tune in. Big market selloff. Got closing bell coming up next. I will see you on Fast Money 5 p.m. One hour to go. Big Options Exprey.