The Great Reassessment Trade 3/28/25
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All right, Carl, thank you very much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour. Stocks down again. Investors continuing to reassess where the markets and this economy are heading. We will trade it with the Investment Committee. Joining me for the hour today, Stephanie Link, Jim Labenthal, Kevin Simpson and Malcolm Etheridge. We'll take you to the markets. We are falling and falling hard yet again. You can see it right on your screen. NASDAQ is leading to the downside.

PCE was hotter. We have the tariff issue we know. April 2nd still looms. Consumer sentiment the lowest since November of 2022. Yields are down. Gold is up yet again. And Malcolm, another S&P 500 target cut today, this time by CLSA, who goes to 5,800 from their prior 6,660.

We came into the year, they say, priced for perfection. What has come to pass has been far from it. Your thoughts? Yeah, I don't know that the re-ratings that are going to pour in now, that it's obvious, right, we're starting to capitulate around this idea that maybe we're talking about more than just a little bit of a correction.

potentially dipping into bear market territory. I don't know that the re-ratings that are going to come should be seen as anything more than a reversion to that, a race to revert to the mean, right? It's everyone trying to get in front of where it's going, but it's already obvious now, right? April 2nd's on the calendar. We know what that likely brings for the markets. And so now it's just everyone trying to get their pencils out to...

make those numbers look a little better. Yeah, Steph, I mean, we've had whether numbers come down in terms of targets, we've had views come down on the stock market. A number of them, in fact, since January. Truist really got the whole thing started. They cut equities to neutral back then. Early March, BCA did. Then HSBC did. Then Citi did. Then Goldman did. Yardeni cut his target.

Then Lori Kalvasina did, then Barclays did. Is it time for all investors?

to do that, to just reassess. Absolutely not. Now is the time to actually get your pencils out and make a list of high-quality companies where you can actually upgrade your portfolios. You don't have to own the number three or number four player in any given industry. You can now get number one or number two on sale. We have been talking about a slowdown in the economy since January. We all expected it.

but we're not headed into a recession. - We did? Wait, wait, wait, wait, wait. - Yes, I've been talking about this. I have been talking about this in January. - I don't think people expected it on January 1st, Steph, come on now. - I have been talking about a slowdown in the economy since the beginning of January because the fiscal stimulus that have been put in place over the last several years is just not gonna happen this year. That was a huge tailwind.

We put $7 trillion of fiscal policies in place into this economy. We had to because of COVID, but we overstayed our welcome. That led to higher inflation. Fast forward to this year, and this administration isn't about fiscal stimulus. It's about lower taxes and deregulation. And now we have to get through tariffs. Where is that? What?

Yeah, do we even hear about lower taxes? Where's the lower taxes and deregulation? Oh, it's absolutely coming. It's absolutely coming. We have to get through the tariff situation. And I would argue that there's a pretty good chance once we find out the news next week, we actually could rally because we're so depressed.

and so obsessed about this whole thing. And by the way, the economy slowing, not a recession in my mind, 1.5%, 2%. That's okay. It's not great, but it's okay. And the data points that I'm looking at actually support still that kind of a number. We have a little bit better

housing data over the last couple of weeks helped by lower interest rates. We had better industrial production. We had better durable goods. Personal income today was actually better than expected. Yes, spending was a little soft. That's not a surprise by any means. In a 1.5 to 2 percent GDP world, you can grow mid-single-digit revenues with a little margin expansion, probably 9, 10 percent earnings growth.

So while I don't like to see all of these strategists lowering their targets and lowering numbers, because we know stocks follow numbers on the way up and on the way down, I do think it's getting a little extreme in terms of it being this massive de-sell. Massive. It's a de-sell, but it's not a massive de-sell. And I would say one last thing. The S&P 500 is down 5% year to date. It feels worse because growth is down 10%. Technology is down 9%. Discretionary is down 10%.

Energy, financials, industrials, they're actually hanging in better. But most people own the growth side of the S&P 500, and they have over the last couple of years. And that was the right move. Financials are down 5% this month. But still up 3% for the year.

Yeah, but you're down 5% this month. Yeah, but the S&P is down 5% and the financials are up 3%. That's an 800 basis point swing. So I talked to Rick Reeder yesterday of BlackRock on the closing bell, who in his mind really summed up, I think what a lot of people are feeling right now related to these markets. Take a listen.

We're in this incredible period of uncertainty and I think the data, particularly corporate data over the next couple of months is going to reflect the fact that people are sitting on their hands. You're in this period of stasis and uncertainty. So as an investor,

You know, what do you do? You take your beta down a little bit. You manage your risk down a little bit. You buy some options to create some upside convexity in the portfolio. But I think you got to, you know, I always said, you know, instead of trying to hedge everything, just hunker down a little bit. Take a little bit less beta risk. Hold on to things like income that provide you a balance in the portfolio.

So that's Jim Rick Reeder. Take your beta down, manage your risk down, hunker down, less beta risk, hold on to things like income. What do you do with that? What that tells me is, well... For Rick Reeder? Yeah. No, I mean, bond guy, but I got it. All right. He hunkered down a little bit. What I don't hear him saying, and I'm with Steph on this, is that, oh, my goodness, we're headed into a bear market. We're heading to a recession. We're already in a

bear market. Like Josh made the case yesterday. Okay, I got it. And look, if you're in a correction, there is always that possibility that it's worse than a correction, that it's the beginning of a bear market. But here are the facts. Industrial production and retail sales are still growing at the latest read. They certainly have muted, and this is Steffi's point, we've had a growth slowdown that creates a correction in the markets. What we're doing this week is actually a classic retest of the bottom.

This is what corrections do. They retest and they really retest your conviction. There are reasons to be concerned. And Rick Reeder was talking about uncertainty. I think we'll all agree uncertainty is very high right now. What I would like to see, and I can't promise that this is going to happen, is that April 2nd is some sort of finality. It won't be total finality. It'll be

but some sort of finality because then we can go into the earnings season and have companies say, okay, we think we know what the tariff picture is. We've seen growing profits. We haven't laid people off. Look, jobless claims are saying we're not in a recession right now. Jobless claims are saying we're actually kind of fine right now, but we need to get this tariff uncertainty done with, let companies adjust to it and move forward. So that's key. So,

for example, the auto companies, okay? Which, you know, well, because it plays off of the point you make, like the finality that we're going to get on April 2nd. Are the auto tariffs going away on April 2nd? No, and that's not the point I'm making. No, I know it's not, but the point I'm making is that, because what some have suggested is going to be a backbreaker, an Armageddon, and you look at Ford and GM this morning,

I mean, coach, can I feel that how those tariffs aren't going away anytime soon? It doesn't appear. So those profit margins, if the president's threatening those companies not to raise prices, where are those profit margins? Zero. OK, so what are those stocks do then? Yeah, no, I'm with you. We're not I mean, we don't have to do the 20 questions. I get where you're going and I agree. And if you'll allow me, what I'll say is that makes it makes no sense. It's true. Everything you said, it makes no sense. If presidential politics.

policy is to now crush the profits of the companies who employ your base makes no sense, at least not to me. So is he nuts? I don't think so. I think, and Stephanie was touching on this, he's getting all the bad stuff out of the way early so he can get to the good stuff.

not just extending the tax cuts but i think he's look he said this he wants to replace income taxes with their what if the best of the best of your if you're talking as if you get bad stuff is going to go away no i hear you on that was not going to have a talk about the good stuff too the very latest act right but what happens if the bad stuff has a more punitive

effect on not only the stock market and stocks themselves, but on the economy, on earnings. Goldman's got $280 next year on earnings. What multiple do you want to put on that? You know what 280 times 20 is? It gets you right where you are. 5,600. It gets you right where you are. That's where we are right now. Do you think $20

Is too high a multiple? Because I talked to a very big money manager this morning who says the market's delusional right now. The 20 is crazy in this environment. If you listen to the members of the administration who have come on this network and talked about these tariff policies, they don't think...

the money manager that I've spoken with, they don't think that that's going away. They think thus earnings are too high. They think the multiple is too high. If the earnings are too high, Houston, we got a problem. I mean, if 280 is 2026, that's a problem unquestionably. We don't know is the unfortunate truth. And I don't want to sit here and talk to you, Scott, or my colleagues here or the people watching and say that I know with certainty. Nobody knows with certainty. That's why we'd like to get these tariffs out of the way and get companies

that so far have retained workers and so far are enjoying growing profits back on the balls of their feet and growing. It is possible that the negatives outweigh the positives. That is certainly possible. We're unfortunately going to have to wait and see. Anybody who says they know is fooling themselves. U.S. companies, they're going to restructure. They're going to increase price. They just will. They will?

going to see improvement. You think Ford and GM are going to increase price when the president's threatening them not to do that? I'm not talking about the autos. I think those are in a world of hurt, and I think that's a totally different animal, to be honest with you. But I would just simply say, U.S. companies are really adapting, and they adapt to change, and they will do so. And they will restructure, and they will increase price, and

by the way, I think that they're actually going to see more productivity. We talk about AI all the time. That is actually going to play right into the strength of companies and that'll help them offset to a degree. I'm not saying it's going to be a perfect match and an offset, but to a degree, I think it will help. That's, by the way, a Wall Street Journal headline, not our headline. It's the Wall Street Journal. Quote, Trump warned U.S. automakers not to raise prices in response to tariffs. A threat came in a call earlier this month.

The president told the executives that the White House would look unfavorably on such a move, leaving some of them rattled and worried. Those are direct. That's a direct from that story from the journal. I guess, Kev, I think what everybody in this market is dealing with is a is a reassessment, a reassessment, what we call the great reassessment trade.

Far different from what we thought on January the 1st, and I think that's the point that we want to discuss. Here it is, January 1st. What was the trade? It was pro-business. It was pro-economy. It was pro-markets. It was pro-M&A. What's the March 28th trade? Surging business uncertainty, sinking consumer sentiment, rising fears of stagflation or recession, and falling stocks. The great reassessment takes us where?

Let's focus on the consumer sentiment because I think that's something that we don't pay enough attention to for good reason historically. But my concern, Scott, is that it could be a self-fulfilling prophecy because to Stephanie and Jim's point, the foundation is still intact. Yeah, we're losing momentum in the economy, but you still have GDP growth, you still have a great labor market, and you still have corporate earnings. So those things are good. The problem is if the consumer is going to stop spending and that sentiment comes to fruition, then you're really going to affect growth, you're going to affect earnings, and

on top of tariffs and everything else, now you start to fear recession for good reason. So I think next week would be a wonderful time to get past some of the uncertainty. I'm just skeptical that that will happen. You know, the other issue is, as Citi says, risk from protracted trade or war, trade war, excuse me, may be underappreciated. Bookvar out today. Bottom line, rising risk of recession is real.

Our senior economics correspondent, Steve Leisman, joins us now with what has to be the Fed's worst nightmare. Still hot inflation, a sinking consumer, rising business uncertainty. What in the world do they do in an environment where the PCE reminds us they still have work to do on inflation? And some of the other data out today reminds us that

The economy is really uncertain at the moment, and I don't know what they might be thinking. You probably do. I can't imagine a tougher position for the Federal Reserve to be in right now.

And I think you're right to characterize what's going on on both sides of the band-aid. The consumer spending numbers were not good if you look at real spending. It was one of the worst numbers we've had in many, many months, even going back to the pandemic. In fact, if you put those two together, the decline in January and the very slight increase on an inflation-adjusted basis. So to me, Scott, we've been waiting to see if the soft data would meet the hard data.

And it has. It has in this report. On the other hand, one of the notable features about today's inflation report was the idea that goods inflation is now part of a problem. Yes, service inflation is elevated and a bit more elevated than it had been. But now you've had two months of

higher goods inflation, perhaps one of those months reflecting tariffs from that were placed recently on China. But it's the first time, Scott, I went back again to the pandemic that the two month average of goods inflation has now exceeded service inflation. So I

I think the story here worth considering, and I don't know if this to be true across the board, but I think the market is overestimating the Fed's ability to deliver rate cuts in the current environment.

It could pass. You could have a rebound in consumer spending because the savings rate is elevated. Stephanie is right. You have had decent income numbers, but they were a little flattered by a one-time-off thing. But in any event, you do have some of the ammunition there to spend.

But this inflation has to pass through, I believe, Scott, before the Fed can act. And I think the market may be a little bit too sanguine about the Fed's ability to ride to the rescue here, at least from a timing basis and maybe from an amount basis.

This week was a pretty good reminder of that, right? Musalem, Barkin, they underscore at least part of what the Fed's current view is, because that was hawkish. There's just no other way to characterize what they said. The president, meantime, we know wants interest rates lower.

The Treasury Secretary wants them lower as well, not by trying to force the Fed's hand. His tact has been different. He's talked about repeatedly wanting the 10-year to stay low, which just underscores even more of a pickle that the Fed is in. The political pressure...

versus what the real backdrop appears to be, not only on the economic but inflation front. Yeah, well, he's getting that lower 10-year stop, but he's getting it through a markdown, I believe, in growth.

And the market seems to be looking past this inflation issue, which might again be the right call. But remember, you had a bump up in tariffs in February. You had, I don't know if they actually implemented, I guess they did implement some in March, but the bigger chunk is going to be in April. That takes you through to May. And if that happens, the market is now banking on, let me get your number here,

I think it's a 70% probability, 72% probability of a rate cut in June. I think that's soon. And you have to, Fed has, there it is, it's just 72. And then that third cut, now that actually went up today.

I would have not been surprised, Scott, if all of those probabilities came down today, because I still think the Fed is going to address inflation before it's going to address weaker growth. Steve, thanks as always. That's Steve Leisman, our senior economics correspondent. I mean, let's just take this, Steph, on the continuation of the theme of the great reassessment, because...

You've reassessed, I think, your view from the very beginning of the year on where we are. I think everybody has. It's laid out right in front of you here where the majority, I think, people came in the beginning of this year thinking this was set up. Pro-business, pro-economy, pro-markets, pro-M&A.

Have we gotten any of that? Surging uncertainty, sinking consumer sentiment and spending, rising fears of stagflation and recession, and falling stocks. Have stocks corrected enough to reflect that? Have earnings expectations come in enough to reflect that?

Has the multiple of the market come down enough to reflect all of that? I actually think the MAG7 numbers have come down enough, Scott. They have been coming down for a while now, and we're starting to see that level off. So I'm really interested to see how they trade when they do report earnings. I have my eye on meta, by the way, to maybe get back into that should that fall a bit more. It's already down about 20 percent from its highs.

But I think the rest of the market, the other sectors, I think those earnings are going to be okay. I think financials will be okay. Of course M&A is slower than we thought, but that is going to be more than offset by net interest income, net interest margin, some parts of capital markets, that sort of thing. Industrials, I am not giving up on the data center build-out. So that's why I was adding to Eaton and Quanta services. On discretionary, I mean...

I can't believe where a company like Target is trading at 11 times earnings. Those numbers have not even come. They haven't been coming down. It's a psychological thing with them, right? They have to prove themselves, execute better. But there are pockets in this market that I have been buying. Mike Mayo, by the way, on your comment on financials, he cut his bank targets today. So has everybody else. Why? Because of the uncertainty and what he calls paralysis.

Goldman, Morgan Stanley, PNC, Fifth Third, Comerica Key Corp, M&T, Northern Trust, Regent, State Street, Truist, U.S. Bancorp, and Zions. They were bullish over one year, given the biggest deregulation in three decades. But the guide may be tricky, given policy uncertainties.

Deregulation is going to be positive for the banks. Basel III endgame is going to be positive for the banks. Everybody has been trimming their targets. Morgan Stanley did it earlier this week as well. And a lot of that has to do with lower wealth fees because of the lower markets. That could reverse very quickly, we know. Malcolm, you sold the XLF this morning. This morning. This morning. At the open. So my question on that is how long do I have to wait for that trade, right? So...

to Scott's setup, we were told coming into this year, January, we were bullish on the G-SIBs. We were bullish on the financial sector. We were bullish on M&A, all the goodies that were coming along with this administration. We haven't seen any of that. And I've lost confidence that we are going to see that in the first half of this year, like I would have been willing to bet back in January, which we were because we went XLF to overweight that sector. So I just think that, you know, yes, there's

the likelihood that eventually we get to that deal-making bonanza but how long do I have to wait I don't think it's just about deal-making for me it was yeah for me specifically I wanted to be situated in the companies that

In either direction that that M&A is happening, the IPO market, them creating the buyouts, even interest rates becoming more favorable to help leverage, help companies that needed to refinance and rework their leverage. All of those positives that Goldman, Morgan Stanley, JP Morgan, all the names you just named, I can't rely on that deal flow anymore. And that's the thing that I thought was really going to juice those profits. Even out of that, it's like economic slowdown.

Falling rates, that's going to more offset a no-deal market? Yeah, lower capital requirements is going to give them more ability to lend. That's why they want it. Lend to who?

To small, medium-sized businesses, to consumer, to large business, to a lot of people. Just ask Jamie Dimon. That's why he complains all the time about the capital. He wants to lend out more. It's too restrictive. So when you lower the capital ratios, the capital requirements, rather, that will be positive, not only for lending, but also for buybacks. And these stocks, some of them are trading at 1, 1.2 times book. Are you making the loans you thought you'd make in a more uncertain environment?

They will make more loans than what they're doing now. I think they will. Yeah, I do, Scott. And by the way, I have been adding to Wells Fargo and Bank of America because I think that the pullbacks from the highs give me a good opportunity on best in class. We know what the cause of all of this uncertainty is. We know what it is. It's Washington policy uncertainty. We therefore know exactly what the cure is. And there's only one cure.

which is to lower that uncertainty if that happens step he's going to be right on with step he on this and you know i look at the banks in particular interested malcolm that you sold them but you know look at something like city group that's in the process of buying back fifteen percent of its market cap and all i can see is that if that uncertainty comes down and the economy continues to grow they'll have bought back at now once again a meaningful discount to their tangible book value uh... that's actually a good thing

What this all comes down to is does the uncertainty decrease? Now, nobody can prove it. I can't prove it either. But unless this presidential administration is absolutely lunacidal, then I think they have to take the uncertainty down. All right. We were just talking about capital markets. I mean, there's a big IPO today. That is for sure. And it's going to be a good barrage.

barometer maybe of where we are, not only on that, but certainly in the AI trade. It's CoreWeave. It's the largest tech IPO we've seen in the U.S. in several years. It's at the Nasdaq. Christina Partsenevelos is up there with the very latest on when we think this might get going.

If you just look at the people behind me, they're quite relaxed, right? Normally, if it's going to be pricing, there'd be a lot more excitement, a lot more employees. The man right behind me is Jay. He's the IPO execution officer. He acts as the middleman between Morgan Stanley. They're the stabilization agent. Right now, pricing's coming in around $42, oscillating around there. Still way too early to call it.

Keep in mind the offering price is 40 bucks, which sounds great. Oh, two dollars more, but much lower than the range they were originally looking for between 47 and 55 dollars. So this company expected to raise about one point five billion dollars through this IPO. Thirty seven point five million shares. We're going to do the math. But overall, that would value it anywhere between 19 and 23 billion dollars.

I think there are definitely some concerns with the debt structure and the fact that they have billions in debt that needs to be paid quite soon. But keep in mind, this is a startup. They started in 2017 and valued at $23 billion in just a short amount of time. They went from a mining company, 3D video rendering, to now an AI hyperscaler competing with the likes of AWS and counting Meta as a customer.

that debt structure, the customer concentration are really some big weights on this company right now. Also, the timing, right? Is this a great time to go to market? Well, that's why, you know, there was some speculation as to whether we'd see this day. But we will. We have it and we will see. And you'll let us know when the stock opens. We'll certainly track it. Christina, thanks. We'll see you many times throughout this day. We know that. Just real quick. You bought more NVIDIA. I did. The relationship this company and NVIDIA obviously is tied at the hip.

You bought more. Yeah, I bought it not because of the core weave, but because of my... You bought more. Stocks traded bad. NVIDIA has. Yes, it traded terribly. And now it trades at almost 23 times forward earnings for a stock. I know I do this every time. Growing earnings per share at 50%. That's, to me, a bargain. Now,

Now, if we're going to have a recession, okay, this trade will look poor. However, I've already said multiple times, I think we are doing a retest of the bottom and a correction. It always feels worse when this happens, especially when you retest. If it turns out, Scott, I'm wrong and this is much worse than a correction, then I'll have to take risk off. Malcolm, you bought more NVIDIA as well.

I did. I think this is a great positioning point for anybody who's missed this like myself to this point, 109, 110, for a company that was up at 148 or so at its most recent high. So we're talking about a severe discount right now at a time when the company hasn't really lost a whole lot of strength. It's lost momentum, sure, but it hasn't lost a whole lot of strength, right? They're still looking at something like a two-to-one ratio between receivables and assets on their books. And so until that happens,

relationship inverts, that's really the only thing that I would care too much about in the short term. We have a lot more moves to get to, many throughout the tech sector. We will take a quick break and we'll do that on the other side.

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All right, welcome back. Stephanie was making the point. She thought that multiples at big tech have come down enough. And Malcolm, maybe you agree because you bought, aside from NVIDIA, adding to that, you bought more Amazon and you bought more Microsoft. Amazon's trying to snap a seven week losing streak. Microsoft is on pace for its fourth straight negative month. That's the longest streak since 09.

Yes. So as the disciplined investor, I like to tell myself that I am. I like to buy strong companies at moments of temporary weakness that don't necessarily make any sense. Nothing fundamentally has changed about Amazon. Nothing fundamentally has changed about Microsoft. For those that didn't really like the fact that their CapEx was $80 billion to $100 billion, well, now you get to buy all the growth that that CapEx buys at a discount, right? So you're

looking at something like 18 to 20 percent off between the two names. To Stephanie's point, she led off with, I don't have to buy the second or third best player in a sector anymore at these kinds of discounts. I can go buy the best name in the space, which is Microsoft or Amazon. And so that's why I've been adding to those names and some of those Mag7 names, especially the ones that aren't negatively impacted by the consumer the way others are. What do you think? Well, I

Well, I was adding to it a couple weeks ago and it keeps going down. So I hope you're right. And I would look to buy more, absolutely. Even if it legs down from here, though. I mean, you're talking about a 20% discount on something that... And you're also talking about 13 times EBITDA versus historically the average of 18 times. So I think to your point of buying something at a discount, I think they are winning in retail, in the consumer. And last quarter, actually, their retail business, they grew 400 basis points in market share.

So they are clearly one of the winners in the consumer. And of course, AWS, once they can get capacity, I think that actually means that they'll see an acceleration in the second half of the year. So yeah, that's why I was adding to it. Jim, Microsoft. Why is the stock traded so poorly?

Well, I think there's been some concerns about the CapEx expenditures. That's number one. I think also, just honestly, it was a little expensive. You go back a year ago, it was roughly 35 times earnings, and it's come down, as you're both saying. I added to it right at this price level about two weeks ago. And, you know, apropos of the NVIDIA ad, what we're all talking about are high-quality companies here. We're not talking about speculative companies. We're not talking about these hyper-growth companies. We're not talking about

measuring companies on price to sales. Why am I going on this rant? Because let's just say that I'm wrong and this is worse than a correction. If you can hang on to stocks through something worse and come back to the other side, you're going to make a lot of money. Only if you're in the high quality companies that are not only going to survive, but

thrive by picking up market share on the other side. That is Microsoft. That is Amazon. That is Nvidia. That is JP Morgan. Go down the list. Jeff, what do you think about that? Yeah, no, I have to agree. I think we're not done. This isn't the bottom. But if it goes down another 10%, you buy more. These are great names and you ride through them. What's the bottom? I mean, how much more do you think the market needs to come in? 10%. 10% more than here? Yeah, why not? That gives you a 20% pullback. Why not? Sounds so easy. Yeah.

Investing is easy, Scott. Buy great companies that have improved profits. That's what we're trying to do here. But seriously, 10% more than the 10% that we had? Yeah. I mean, if you're asking what the worst case scenario is, that's what we've had on our whiteboard for some time was a 20% retrenchment. And that's a lot more than 20% from some of these bigger names as they've come down. But we're closer to the bottom than the top. I would be buyers here. We don't want to look back in hindsight.

If next week we get some clarity, we're going to look back and think like, gee, we missed it. So you don't buy everything here. You don't try to time the market. Buy some here. If it goes down, buy more. If I'm wrong and the market goes up, great. I hope I am. Well, I mean, why did you trim Tesla?

we made 40 well we've had a lot of fun talking about tesla tesla by the way the price target a long time bull today at deutsche bank cuts the price target to 345 from 420. you know you all can see where it's trading now um but you're telling has your view here changed you don't think this is i mean you said buy great companies when they come down a lot now you're trimming this one

I want you to invest in great companies. We trade in Tesla. So we talked about this last week at, what, 236, and it went up to 276, and we trimmed it. We sold 30% of our shares after a 40-point move in a week. It's also different for me to own Tesla than a retail investor because I can write calls against it, and that's a big difference and a big advantage that I have. So for me, I think it was an awesome trade. I'm not in it for the fundamental case. I don't know about this analyst call, but I think we made a lot of money with it.

I'm happy to sell some here. If it pulls back another $40, I'll buy it back and try to trade it again. Okay. Silvana now has the headlines for us. Hey, Silvana.

Good afternoon to you. The Trump administration is asking the Supreme Court to step in and vacate a district judge's ruling to bar deportations under the Alien Enemies Act of 1798. So in the emergency appeal, the Justice Department argued federal courts should not interfere with sensitive diplomatic negotiations. Earlier this week, a federal appeals court denied the administration's request to pause District Judge James Boasberg's order.

More than 140 people are dead in Myanmar after a powerful 7.7 magnitude earthquake rocked the country overnight. That's according to state media, which also reported over 700 people were injured. While in Thailand, an official said at least eight people were killed in the capital of Bangkok, where a state of emergency was declared. The U.S. Geological Survey warning today the death toll could reach in the thousands.

And safety regulators are opening a probe into more than two million Honda vehicles, including the Pilot SUV and the Ridgeline pickup truck. Regulators say they've received complaints that the engine fails to restart on its own from a complete stop when the auto idle stop function is engaged. Scott, I'll send it back to you. All right. OK, Silvana, thank you very much for that. That's Silvana. And now quick break.

Have even more moves to get through. We'll try and get some calls in there as well after this quickie.

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All right. We talked a lot on this show, as you know, about cybersecurity stocks, which especially CrowdStrike had been caught up in that momentum downdraft. You noticed that and you bought more of that along with more Palo Alto, too. Tell me.

Yeah, I think as we're talking about whether we're in correction territory and here's the bottom or if April 2nd represents something worse and the markets go further from there. To me, cybersecurity is a sector within the software space, within the tech space that is defensive against a lot of what we're talking about, right? It's a non-negotiable as far as enterprise line items across their balance sheet goes, sorry, their spending plans go. And I think that not just looking at

Palo Alto trying to move away from on-prem and into the cloud and looking at something like a CrowdStrike that's already there. They've shown their platformization strategy is working. Look at a Zscaler, which I also own, similarly situated. So those two I would even put ahead of Palo Alto right now, which is still trying to make that transition to being a platform, which I do believe in. I think those two are already frontrunners heading toward that direction. Spotify.

Yeah, more of that, too. So Spotify, to me, is another one of those that looks defensive. If you like Netflix, you should also like Spotify because the inelasticity of those streaming platforms has shown itself. And I think that Spotify is just a couple of years behind where Netflix is with its paid user growth. I think like a third now of all of their monthly active users are on the preseason.

the premium tier, that's music to my ears as a Spotify shareholder, no pun intended. But I think that that's a really great place to be putting dollars to work where you're worried about maybe the consumers looking to pull back some of their spending. - Bought more Oracle.

So Oracle, I'm very bullish still on the AI trade. I think that infrastructure is really going to matter to Steph's point earlier. And I think Oracle is one of those that's, again, here's the theme, selling at a significant discount compared to where it was. So if you liked it back then, you should really love it right now. Does anybody, by the way, like the CoreWeave?

IPO, anybody looking to buy that? If you said you're still bullish on the AI trade, why not you? Why not today? We're talking about a company that got its origin story started with Bitcoin mining or Ethereum mining. And then once that wave crested, it made its way into the AI trade. I think that realistically, you're talking about a reseller of NVIDIA GPUs. It's why NVIDIA had to step in and stop them out. Not really a business model I want to be throwing. All right. I should just mention everybody. We're still waiting for the IPO. I know all of you have interest.

in what happens here for a variety of reasons and we'll bring you the very first trade once we get it may not happen until after our program's over but nonetheless we as a network are all over that and you'll hear more certainly about that you want to do quick on getting stopped out of toast it just didn't work out we like the company we like the product the stock didn't trade well for us we got stopped out at 36 dollars all right santoli he's next with his midday word we're back after this

I mean, we do have a lot of moves today. That should kind of tell you something about how our committee feels about these markets, Mike, which, as we said at the very top, are really going through a great reassessment where you thought and where we are.

Yeah. And on multiple fronts, Scott. So obviously the rethink of the AI infrastructure theme and then obviously sort of being disappointed on both the economic growth and inflation sides of the equation. What does that mean for rates? I hate the stagflation term, but it does suggest a little bit of negative offsets in terms of what the Fed can do to rescue things. But

individual stocks, I was just looking like more than 40% of the S&P 500 is already more than 20% off its 52-week high. So there's been a lot of churn and damage. I think Wall Street kind of wants to wait and see to see some of these kind of policy cards turn over. But when the market is already correcting and when you're sort of below your 200-day average and people are a little bit on edge,

it doesn't just wait and see. It has to retest. And so we've been saying it all along that, yep, V bottoms happen, but they're not the norm. You can have a plausible low from March 13th, but maybe not the persuasive, absolute tactical low. I think we're dealing with all that stuff. And I'm trying to be mindful of the idea when sentiment gets this bad or when the market has gotten a little bit stretched to the downside, you just look for things to be slightly less bad. And maybe you get a clearing event psychologically with April 2nd. It's just tough to

put money behind that idea in the moment. April 2nd, jobs report next week, earnings front and center.

Is that enough to stem the tide? Yeah, I think the big question is, has the bar been lowered enough for earnings? Either absolutely in terms of consensus, but also in terms of share price. That'll be tested. And yeah, jobs, I mean, that is maybe going to be a little bit of a firewall here because today's consumer spending number, it definitely did just nag at that sense that we see the confidence plunge. Is it going to show up in hard data? And I think people are

are capturing this notion there that maybe it is starting to show up and everyone has to revise down their GDP numbers. All right. I'll see you in a couple hours on Closing Bell for your last word of the week. That's Mike Santoli. We have more moves from Kevin. I've got three or four in front of me from Kevin Simpson. We'll do it next.

We're back. More moves. Malcolm, you bought more PayPal. Yeah, that one's a play on Venmo, which Alex Chris at this point has yet to really find a way to monetize. But very few companies get to change the lexicon and jump from proper noun to verb. You know, you think Uber, you think Venmo is one of those kind of names. And so I think that there's a lot of opportunity here with that one trading now at something like 65 bucks off 30 percent from its 52 week high. Not a bad place to start getting into it.

All right. So, Kevin Simpson, number of moves. You bought more Amgen. Why? We had Amgen called away on March 7th in its entirety, so we've been buying it back. Very good valuation, 3% dividend, strong pipeline. If you're thinking about AI, I think you have to consider biotechs as part of the conversation moving forward. What about Howmet Aerospace? What's that about? You bought that. Is that a new buy? It is, Scott. We've had a stressful day. Markets are down big. Let's have some fun.

Okay. How much is a new aerospace stock that we bought in our growth strategy? And I've been excited to tell you about this one because it's like TPL. When I brought that over the summer, Texas Pacific Land Trust, when I bought it, it was up 100% year to date. You looked at me like I was crazy. And that trade worked out really, really well. I'm not sure if this is going to be just as good, but it's up 95% in the past trailing 12 months. So for those of you playing along at home, don't follow me into this with all of your assets. But

This is a company in aerospace, strong growth, excellent margin. 50% of their revenue, Scott, for defense are coming outside of the U.S. So if you believe that these other countries are going to build up their defenses, this is a company that's going to benefit from it. And I'm excited to start talking about it today. You sold covered calls on Amex and Home Depot. Yeah, knowing that the stock market has a little bit

of pressure here, I think writing covered calls is something that everyone can be doing to harvest volatility. It's not a testament against either one of these names, but we think that we can harvest that vol, make option premium, still collect the dividends at the same time. Steph, you own Home Depot.

I do. And it's been disappointing. It's down 8% year to date. But I do think the valuation at 23 times is kind of interesting because its historical average is about 26 times. And they just posted their first positive same store sales number in two years. And you have the spring selling season. You've got great operating margin, upside opportunity, and the SRS acquisition synergy. So I still like it. Okay. Final trades coming up.

All right. We're still waiting for that Corweave IPO to open. Christina Partsanovalos at the Nasdaq has the very latest for us. What do we know? Latest, $40. That's what he's telling me right now. I asked casually, when is this going to open? Soon, soon. And he's not yelling out the 15-second warning, which really stands for about 30 minutes. So we could be waiting for a little bit longer.

in terms of the IPO pricing, which we know is lower than what they originally wanted at $47 to a $55 range. Still hoping to raise $1.5 billion in value of this company at $23 billion total.

Scott? We were around 43, though, right? A little while ago. Yeah. It was a little while ago, 43. Then it dropped to 42. Now I'm being told 40. Yeah, that's what I thought you said. I just wanted to make sure I heard you correctly. That's interesting in and of itself. All right. Thanks for the update. We'll see you in a little bit when all this gets going. All right. Let's do some final trades. What do you got, Malcolm? Yeah, I said it once before. I'll say it again. PayPal. PayPal.

Okay, which you just added more to, as you said. Kevin Simpson? Meta, of the MAG7 names, this is our top pick. Great free cash flow, huge margins, and now they're buying back shares. They even pay a small dividend. Okay, Farmer Jim? AbbVie, healthcare. Obviously, that's defensive, but this is a stock that is in a nice uptrend. It's pulled back a little bit. Valuation, very attractive. Good management, good product pipelines. This is one you should own. Steph?

Snowflake gets down 23% from its highs. They have new product momentum and product revenue growth of 28% and gross margin and operating margin upside. Okay, so we have a Dow down by more than 600 points. You know that story by now. We'll take it through the final hour and we'll be joined by Robert Kaplan, Doug Clinton, Lizanne Saunders, and Ed Yardeni. So the deck is stacked. I will see you in a couple hours.

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Under Biden, Americans' cost of living skyrocketed. Food, housing, auto insurance. Lawsuit abuse is a big reason everything's more expensive today. Frivolous lawsuits cost working Americans over $4,000 a year in hidden taxes. President Trump understands the problem. That's why he supports loser pays legislation to stop lawsuit abuse and put thousands back in the pockets of hardworking Americans.

It's time to make America affordable again. It's time to support the President's plan.