Closing Bell Overtime: Stocks Gain Despite Oil’s Rise; Finding Tech Opportunities Outside of U.S. 3/17/26

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Schwab.com slash trading. Not every sale happens at the register. Before AT&T business wireless,

checking out customers on our mobile POS systems took too long. Basically a steering contest where

everyone loses. It's crazy what people say during an awkward silence. Now transactions are done

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everything. The Bell is bringing in to the trading day at the NYSE Diazio ringing the bell

and at the Nasak Ava technology is doing the honors. Welcome to the closing bell over time,

we're live from Studio B at the Nasak market site. I'm Melissa Lee along with Mike Santoli,

stocks higher across the board tech leading for the second straight day. The Nasak up about half a

percent more of the markets straight ahead. On our radar at the close, we are awaiting results from

Lulu Lemon and DocuSign. Also, where the next big thing in tech could come from and two tightens

in media one stepping away, the other caching in. Melissa, kind of a benign kind of slow drip

upside move today. You say benign, I was thinking, man. Well, it's pretty much a sin in him, I would

argue. I guess the most optimistic take is if oil can go up two or three bucks and the

broad equity indexes can sort of shrug and make moderate progress as they did today. That's maybe

represents a little bit of a resilience in the tape. I don't think it's quite getting to that

point. It's very indecisive. We couldn't hold above on the S&P levels when we reached Friday

morning. It's funny, a few weeks ago when the markets started to pull back, I and others were

saying, you never want to break that December low in the S&P 500. We literally are there right

now. We went below it and it's kind of nothing much going on. So I guess you could say sometimes memory

stocks can get a bounce and Amazon does a little bit. Banks didn't go down today. Private capital

stocks were up, but it seems very much wait and see and we're not going to make any sudden boost.

And there's differentiation within the AI trade and we were talking about how Jensen Huang

wasn't able to rally and video stock at all. But under the surface, the things that he talked

about is benefiting from his company's growth in AI. They actually benefit. Anthony, for instance,

what he talked about the need for copper connectivity and top of optical Uber and Lyft. So it's

interesting to see how at the index level, not too much overall since the conflict began,

but underneath the surface, there is a lot of that. Without a doubt, the market is trying to

separate those winners from losers. Let's get more on today's market action as Nvidia. Once

they get a big driver, SEMA Modi is taking a look at all the ripple effects. Hey, SEMA,

yeah, we're actually going to look through all the winners and losers. Melissa, that $1 trillion

backlog, not enough to boost shares of Nvidia, which ended the day down just about three quarters

of 1%. But where we did see sizable gains, memory stocks, as investors count down to microns

report tomorrow, we did see Seagate, Western Digital, up about five to 9% on the day. But let's focus

on micron shares trading at all time highs now up 60% year to day. Pretty impressive when you

compare to the S&P, which is down about 1.9% so far this year, the stock seeing price target

hikes from Cowan, RBC capital and Baird. Micron said it's high bandwidth memory offering is in

production for Nvidia. And then the ride handling stocks also on the move after announcing different

partnerships with Nvidia, Uber on Robo Taxis. It said it's rolling out autonomous services

enough to 28 cities worldwide by 2028 and Lyft on AI tools to enhance a precision across its

app shares ending higher by about 4%. The airlines getting some attention today after issuing a

strong outlook, downplaying the negative impact of higher oil prices. In fact, Delta CEO Ed Bastion

telling CNBC that strong demand has led to higher revenue growth than expected, despite inflated

jet fuel prices since the war in Iran. Starting, we saw Delta up about 6.5% mic.

See, but thank you. Well, stocks rising today despite again in the price of oil. As we mentioned,

Pippa Stevens has the numbers for us, hip-hop. Hey, Mac Brent, holding at 103 with WTI at 96,

amid reluctance from other nations to escort tankers through the Strait of Hormuz with Iran,

also targeting UAE energy infrastructure. JP Morgan noting that WTI and Brent prices

have remained relatively contained because both are Atlantic, Basin, Benchmarks,

while the physical disruptions are concentrated in the Middle East. Both Dubai and Oman cash prices

are now trading around $155 per barrel, which the firm said highlights the severity of the

shortage in barrels originating from the Gulf. And a spot barrels become very expensive in Asia,

there are early signs of demand destruction kicking in. Here in the US, diesel prices topping

$5 per barrel per gallon, I should say, for the first time since 2022. As product markets get squeezed

with heating oil futures, a proxy for diesel up another 4% today. Jet fuel seeing the largest

increase since the start of the war with those prices doubling crude rise. Guys, Pippa,

some ships are able to, some tankers are able to transit through the Strait of Hormuz along the

coastline of Iran. Is that in any way impacting the price that we're seeing?

So I think there's some relief that there's a perception some ships are getting through, but of course

it's very specific ships. And if you actually look at the route that these vessels are taking,

they're going kind of north between Gosham and Laric Island. So they're passing, that's not the

usual route. So they're clearly passing through Iranian waters with some reports that might be

to verify the cargoes, verify the ownership and where they're headed. So it's certainly

something, but it's definitely nowhere near the traffic we saw prior to the closure. And clearly

it's very targeted cargo is getting through. So the market very much still on that chair.

Yeah, and I guess the forward price is too moving up in lockstep really with WTI

spot around 80 bucks come October of this year. Pippa, thank you.

Our next guest says oil is the deciding factor that will determine which of two diverging

forces will win in this market, which right now, according to the S&P, showing a rare oversold

condition. So either prices will fall further to justify this technical damage or those oversold

conditions will be resolved. Joining us now is bespoke investment group co-founder Paul Hickey.

So Paul, first talk about how even though the S&P 500 is not that far from its highs,

it's registering a little bit of an extreme in terms of downside relative to its trend.

Not a little bit of extreme. It's one of the, we closed last week, three standard deviations below

the 50 day moving average. That's in the 99th percentile of daily readings in the S&P's history.

So you tend to see that during major geopolitical events, shocks and such.

We were less than 5% from a 52 EI on the S&P 500 Thursday. There's only been two other days

throughout the last 100 years where we've seen a similar situation. One was in 2015 and one was

in the early 1960s. So this doesn't happen very often. And what you were saying Melissa before,

there's a lot going on underneath the surface, but it's like as calm as can be right at the surface.

But that's the reason though that you can register that extreme with a small percent is moved because

its relative deviations are tangents that has compressed. But it's just so rare to see these

kind of swings. And we can swing from overbought to oversold and it takes less than 2% to do that.

So it's a major shift, but it comes down to, we for that big run off the April lows,

we wanted to see the rally was so strong, people said we need to rest, consolidate.

Well we got it, we've been trading sideways, we got it in spades, it's the most calm market we've

seen in the last, you know, this last since October. So you know, we got it now and now people

are worried, but we're at this level where people are concerned because the market's not doing

anything and now oil spikes. And that's, it's like the COVID case counts back in March 20, 2020.

What happened in those two other instances? That's a great question. But in one period we were

up one period we went down. So it's a small sample size and it's not even decisive either way.

This just tells you how rare this happened. It's very rare, but what people do tend to think is

that, okay, we've seen this tight range, we're going to go bananas in one way or the other.

The reality is you tend to just see a pickup and volatility over time and it's not this, you know,

major, you know, breakout event that you tend to see or break down. This notion that we're

sort of going to be spring loaded if there's any sort of a victory declared, you think that's not,

that's not the case according to what we've seen in history. No, but I think it'll be a big

sigh of relief. I think if we see oil prices decline, I think that'll be, let the market and let

us focus on other things like the economy, which is doing pretty well. You know, all the concerns

about the consumer, the airlines come out today, Delta with positive. You may say that's front

loading before they raise fares, but it's very strong demand. We've been seeing strong demand.

Consumer perceptions are monthly consumer poll survey has shown that consumers are most

optimistic about their personal finances than they've been since early 2022. So it's, you know,

cratered down and now we've been coming up. So it's a very, it's not as bad for the consumer as

some of the headlines would suggest. At these times when you see this kind of sort of slow grudging

decline, we keep talking about this, everyone sort of says, okay, well now we need something

a little bit more dramatic on the downside, just to kind of flush things out. You don't always,

I guess, we didn't get it in a 5% pullback in November, but how would you be, you know, kind of

trying to read whether the market's showing its hand in that way yet? You know, I think what we're

watching is we've broken the 50 day moving averages. We're starting to approach the 200 day moving

averages. If we got a break of the 200 day moving average, that would, you know, it could be a fake

out, you know, you had to run and say, okay, there's the breakdown and it caused a little bit of

short term selling pressure and then I think then maybe you could see the market start to rally.

But again, it's going to depend on oil prices. We've seen oil prices go up an average of $2 a day

since the war broke out. If you just extrapolated that trend going forward, you're at 150 by April.

It was interesting when you were on the halftime report earlier today, Mike. You guys are talking

about the notion of capitulation, which is what you were mentioning and Josh Brown said something

like, you know, we remember that because we're all old and we remember that because of the markets

we know, but things are different now. Maybe you don't need that sort of capitulatory selloff. I

don't know what, what are your thoughts on that? I thought that was an interesting notion. Maybe the

markets are sort of... Well, yeah, I mean, you've seen plenty, I mean, April, you saw a big capitulatory

selloff, but in other periods, you don't necessarily see that. So you don't have to see that.

But we've seen, again, breadth over the last two weeks has been very weak. The 10-day advanced

decline lines have hit their lowest levels in more than a year for the S&P and the majority of

sectors. And when you see that, that's sort of an internal flush without the market really falling

apart. Right. Yeah, you'd give up one piece at a time as opposed to everything at once.

Yeah, and then three sectors are down more than 10% from their highs. So we are seeing some

corrections. Yeah, Paul, thank you. Thank you. Thank you. See you.

Lululemon earnings are out. Let's get the Gabrielle von Rouge for the numbers, Gabby.

Yeah, so Lululemon reporting Q4 revenues of $5.1 on revenue of $3.64 billion. That's a beat on

both ends, but expectations have come down over the last few months. Guidance, however, which is

the story here, missed on both the top and bottom lines. 2026 earnings per share are expected to be

between $12.10 and $12.30. That's well below expectations of $12.58. I spoke with interim CEO

Megan Frank just before the release. And she said the company is reducing promotions was expected

to weigh on sales. Now on the bottom line, the biggest headwinds are higher cost.

It's proxy battle with founder Chip Wilson and tariffs. On a net basis, tariffs are expected

to cost $220 million this year. That is up from the $213 million it already cost last year.

And of course, Lululemon's largest market, the Americas, was down once again during the quarter.

It's expected to decline between 1% and 3% on the year. Frank told me the company is aware of

the problems it needs to fix and is seeing green shoots from the first product line from Lululemon

Creative Director. She said they're still meeting with potential CEO candidates. So no news

on that front. And she will share more when it's time. Gabby, thanks. Gabby, I'll phone

Rouge with Lululemon shares are down 2.8% right now. We've also got results from Dockieson. We

want to get to see my modies got those numbers. Sima Melissa, four court numbers from Dockieson.

Topping Wall Street estimates with earnings at $1.00, adjusted versus the 95 cent estimate revenue

ahead of consensus as well as buildings which came in at $1 billion if we look towards guidance

now for the for the first quarter revenue guidance above estimates as and if you take a look

at gross margin estimates a little light. But the story here also has to do with a buyback.

The company is increasing its buyback program by $2 billion. The company also announcing that

and in Dreson, GP, Brian Roberts, a general partner has joined the company's board.

We're looking at the stock up about 4.8% going into today's report.

Shares were down about 48% from its recent high that was hit back in August.

We'll look for more guidance on the company's earnings call. We should begin soon, Melissa.

All right. Sima, thanks. Sima Modi. Let's get now to the concerns in the debt market.

According to Bloomberg, a group of banks led by JP Morgan halted a $5.3 billion debt deal

for software firm Qualtrics International. The deal is said to have stalled after failing to

get enough interest for investors amid concerns about AI disruption to the software industry.

Qualtric existing loans has now slumped to about 86 cents on the dollar in secondary trading.

Earlier today, our Leslie Picker spoke with Orlando Bravo, founder of Toma Bravo and asked him whether

he thought software exposure and private credit was going to be the next crisis.

In general, definitely not a Toma Bravo. We, once again, we're not perfect. We have made some

mistakes, but that's why our investors are relieved. For the most part, we buy the highest

quality software company, and we're known for running them really, really, really well.

And we're solid where we are now. Now, there was a lot of access in the business in general,

private equity, private credit, and software in general since 2020-2021.

Some of the issues now in those sectors that relate to software are due to those

excesses. And some of those issues are also due to the interest that generalists had

in buying software companies. There are so many cases that we've seen where generous

investors that are good in general have entered the space and have bought software companies that

really lack deep franchise value, even though their gross retention and net retention metrics

are good. And those companies now have a bit of a more uncertain future with AI right upon us.

I thought I was interesting, his mention of generalists specifically doing the bad underwriting,

doing the bad lending, because there was a lot of money flush into this, and it seemed like

everybody in their brother was doing private credit, and private equity, and here we are,

that's what happens, things get a little sloppy. And as we keep mentioning, software was viewed as

being uniquely attractive to lend to because of these multi-year subscription-based revenues.

And this Qualtrics situation is kind of what people are worried about, which is a company with

existing debt that was taken private, it's going to need to roll it over. So there is this

refinancing bulge that has to be met. And if it's not going to happen by the market today,

obviously, that starts to create some hard decisions down the road. I don't know that it gets

systemic, obviously. We never know that. If it really does leak into the banking system or

anything like that. But it is, look, it is interesting, and it's going to be kind of prove it.

You kind of like prove your innocence, not your guilt. And every little crack is going to be

scrutinized. We did see the private equity names, all those names were hired today,

banks as you did well. Yeah, they were. So there was some. A little bit of relief, yeah.

Well, earnings from Lulu Lemon out just moments ago, the stock is lower after hours,

up next. Look at an analyst reaction to the results. You're watching Closing Bell

Over Time. We're live from the Nasak Market site.

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Not every sale happens at the register. Before AT&T business wireless, checking out customers

on our mobile POS systems took too long. Basically a staring contest where everyone loses.

It's crazy what people say during an awkward silence. Now transactions are done before the

silence takes hold. That means I can focus on the task at hand and make an extra sale at two.

Sometimes I do miss the bonding time. Sometimes. AT&T business wireless, connecting changes everything.

Healthcare, the worst performing sector today. Eli Lilly was a big culprit. The stock falling

as HSBC downgrades it to reduce from hold and cuts its price target to $850 a share. It's about

10% below the current price. The analyst saying the shares are priced to perfection and estimates

the total addressable market for obesity drugs right now are too optimistic. The shares down

about 6% to $930. Let's get another check on shares of Louis Lemmon the after our session.

The company is under pressure beating on the top of the bottom line with missing on guidance.

The company saying chipberg the former CEO of Levi Strauss will join the board.

Joining us now is BTIG's managing director Janine Stickdurch. She's got a buy rating on the stock

but reduced her price target from $303 to $250 just last week. Janine great to have you with us.

Thanks for having me. You said the risk reward is attractive but there are a lot of questions

so far from what we've heard. How many more questions are there? Are there more questions for your

questions? Where do we stand? I think there's still a lot of questions. I mean I think the reason we

have a buy rating here is we think there's a lot of self-help and execution opportunity. This is

clearly a company that has a strong brand but has not executed. I think they're all

looting to a little bit of that you mentioned earlier that they're planning on reducing promotions.

I think they realize that there's a need for a better product newness but we're still very early

in that and the big question we don't have an answer to is who's in the CEO. So I think people

will take a look at the guidance that they gave and say great but we don't actually know who's

underwriting this guidance when we're selecting a leader. The analysts who are bullish and the

investors who are bullish always say that Lulu's got a great brand but to what extent have they

actually sort of chipped away at that brand equity with the product missteps over the years?

I don't know if they've chipped away and I think that they've almost alluded who they used to be.

When I think of Lulu Lemon in its heyday it really was known for being creative and unique

and something really different and I think they lost that fund somewhere over the years trying

to be a little bit too much of everything to everyone. So to me they need to refocus,

figure out who they are. A lot of that comes back to bringing back technical innovation.

That's really where they were rooted and figuring out how they can be special and different when

there's a lot more competition in the market now. Is there anything happening sort of category

wide that's an extra challenge in this area? It just seems as if I mean you could have said

something similar about Nike for example right where there were new entrance and maybe they let

the brand stray a little bit at the same time than maybe as a category people aren't as excited

about it. For sure I think we are past the peak of where everyone is wearing leggings as they're

everyday wear and that's the pinnacle of fashion but there's still I think we also have the need

to want to be comfortable and there's a way that they can innovate around that it might not be

leggings it might be more sweatpants and relax fit pants but there's a way that they can do this

still be sure to brand and maintain the standard that they're on for. Is it total spend in the

category still the same where has that overall shrunk? I mean we're always talking about

aloe and viori taking away share from Lulu and that might be happening but at the same time maybe

people are not spending as much on leggings nowadays. The market is roughly flat it's a little

bit challenging to disaggregate because kind of going back to the earlier point there is this

this this meshing of fashion and function where it used to be very clear technical apparel fashion

apparel now there's an intersection that's more blurred than ever and I think that's where the

opportunity for them is to figure out a way to innovate in this area. What do we think the I mean

for a time it was possible to look at sort of how under penetrated Lulu was in terms of physical

store locations and things like that. What about the pace of expansion or its overall corporate

ambitions at this point? We think they're largely mature in the US. This isn't a brand that needs to

grow double digits in the US any longer if they can do low single digit to mid single digit growth

in the US that's great. The growth that we're going to see is from Europe it's from China it's

from international so they can just find a way to eat eat out moderate growth in the US and then do

double digits in a national that's still a good growth algorithm. Two of their cost drivers were

tariffs and the proxy battle against chip Wilson's got three board nominees. Who do you want to win?

I mean do you want chip Wilson to step in and shake things up because he said that basically

the board has overseen all of these CEO transitions turnovers and maybe they're not well-equipped

for this next phase in Lulu's history. Yeah I mean I think we do need some level of outside

perspective. I think the question is is it come from the board or from a new CEO. We're more

focused on the CEO right now. I think we need someone with really strong brand management experience.

We know that the activist right now is looking at Jane Eelson and we like that can date very much.

So we're prioritizing the CEO change versus the board change right now. Okay.

Janine thanks for stopping by I appreciate it. Thank you.

The instructor. All right well so far this year energy is by far the best performing sector.

In second and third place though consumer staples and utilities generally seen as safety plays.

Coming up we'll look at the changing risk appetites in the market among professional investors

over time we'll be right back.

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you trade brilliantly learn more at Schwab dot com slash trading before we had AT&T business

wireless coverage our delivery GPS wasn't the most reliable once our driver had to do a fourteen

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business wireless connecting changes everything welcome back check out bitcoin and ether today bitcoin

gaining getting close to seventy five thousand dollars once again the cryptocurrencies have had a

strong run this month as the Iran war started ether since around war started i should say ether

is up more than twenty percent some of the crypto related stocks such as robinhood coin

and strategy also nice runs recently continuing today

all right well we're going to take a look at part of the bank of america global fund manager survey

today most of was this risk appetite gauge which basically asked the fund managers how much

portfolio risk you now taking relative to normal whatever normal is for you and i like this goes

back more than twenty years and we see entering the year we were at this extreme level and that was

you know some like fifteen percent on a net basis more than said they were taking less risk

and i don't think it tells us much at the current level it's very much neutral it's not these major

kind of bottoms that was twenty twenty two at the end of the bear market this was the tariff panic

uh... that's the end of twenty eighteen after twenty percent decline however i would say next time we

get up here pay attention because this was early twenty eighteen right before really stiff volatility

storming correction and that of course was the end of twenty twenty one into twenty twenty two so

it seems as if when the investors are saying yeah we're running pretty hot here in our own book

uh... you probably want to listen to them exactly all right time that for cmbc news update let's get

to mccansey so gallows for that mccansey hey male the house oversight committee today said it is

the peanut attorney general pambondi for a deposition over the justice departments handling of the

epstein files critics have continued alleged that the doj improperly held back materials during

the release of millions of documents supreme court chief justice john robert said today that

personal criticism of judges is dangerous and said that it has to stop federal judges have

repeatedly warned in recent years about an increase in violent threats the chief justice did not

mention president trump over the weekend the president posted that the high court has become quote

little more than a weaponized and unjust political organization and according to a court filing

elan musk and the securities and exchange commission are in talks to settle the regulators lawsuit

which accused musk of waiting too long to disclose his purchase of twitter shares

and the run up to buying the platform the sec argued musk should pay a fine and repay a hundred

and fifty million dollars to investors musk has called the reporting delay inadvertent

what's up sending back to you

mac thanks mccansey so gallows well every single stock of the mac seven

lower so far in twenty twenty six so where can investors look for the next

hot thing in tech our next guest says the next big winners in tech will be overseas he'll make

us case coming up on over time

welcome back to closing bell over time live from the nasdaq market site stocks hire once again

today a very small gain for the doubt the nasdaq was up nearly half a percent all the major

averages have been down three weeks in a row entering this week today's gains coming despite an

increase in the price of oil later on ninety six dollars a barrel for wti energy stocks the best

performing sector on the day with haliburton and baker Hughes the leaders well and video gtc

conference is underway this week with ceo jensen wong saying he sees one trillion dollars in orders

for its blackwell and rubin chips this is hyper scalars continue pouring hundreds of billions into

AI infrastructure and build out our next guest says he's bullish on global tech and predicts

that the future generation of tech winners will merge outside of the u.s joining us now is being

neat kathari founder and managing partner at technique capital management with one point two

billion dollars under management being great to have you with us thank you for having me lose

so what is the primary reason why you're looking outside is at the valuation differential that we're

seeing outside versus here is it the where we are in the ai cycle can you walk us through it's

where the money is going so this trillion dollars that Nvidia's customers are going to be spending

with them and the trillion dollar build out that the hyper scalars are doing ninety percent of that

money ends up in asia asia is where the chips are made it's where the memories supplies made it's

where the robots are made it's where the batteries are made that is the supply chain they have invested

30 years building that supply chain out they are sort of ready for this moment and i think there

are countries that stand out like china where the valuation argument also becomes extremely compelling

so you sort of have a confluence of that's where the money is going and you've got skewed risk

reward because the stocks are much cheaper there you're recently handled in some of the

korean south korean chip makers have exited out of them that i mean we saw that sort of flush

with the start of the aron war and i'm just when it where you cycling that money into at this point

i just came back from asia i think what's happening in china is still underappreciated and we all

know why that's become less of a focus for us investors but china has luckily found themselves

in a position where they've got a massive lead on electricity and power so in the us

we are going to have something like a 44 gigawatt shortage of power over the next several years

china has a 400 gigawatt spare capacity they have built in one year 500 gigawatts of power

i think this year alone they have built more solar power year to date than the entire history of

the united states so they are sort of ready for this moment they happen to be just like in video

was never meant to be an ai company their chips happen to work well and i think that's where you

can buy data center companies in china that the entire data center market in china as a publicly

market that listed market cap of ten billion dollars you have uh... you know you can't get anything

for ten billion dollars in america these days the way you presented it's it's that asia is where

the infrastructure is going to be sourced so this is different than saying you know that there will

be a parallel AI ecosystem through you know deep seeking all the domestic uh... players there

that is worth playing right i mean it how does it fit into the whole there's there's the digital

layer which i think america leads on yeah uh... then there's the physical layer ultimately to create

value to create economic surplus it has to get converted into something usable so i think one of

the things america and the hyperscalers here obsessed with this a g i which is sort of abstract

endless debates about land and what does it look like in china or in most of asia they're obsessed

with our wise they're in a bear market over there so the only thing that matters is how can we make

money uh... so they're focused on robots and robotics they're focused on these manufacturing

buildouts they're building uh... the physical layer i think on top of that they are also capturing

a lot of the spend that comes out of the semi market so i think there's both uh... spill over

from the digital layer and then there's the physical aspect there's something additional that's

important which is china is very likely to do with a i what's what it's done with every other

sector which is overbuilt they overbuilt uh... evis they overbuilt solar they've overbuilt factories

that generally ends up uh... in all the other nations around the world right the global south four

billion people we think it's very likely that china overbills a i and that creates economic surplus

for all these emerging market countries because they're going to export it out you know you could buy

a ten thousand dollar b y d car brazil uh...

just like that and a lot of that came out of over supply they made too many evis for their population

same things gonna happen here that's on the road right yeah that's going to happen in the next

and it's going to be massively deflationary right uh... but also massively bullish in a brazil in

india's and and the vietnam's of the world probably can't do what china can do and they're going to

just be able to buy it from china on the cheap some of your holdings top holdings dd global which

is like the uber of china uh... can's on can's on uh... bee semiconductor industries gds so a lot of

picks and shovels here yeah yeah yeah there you know the the in the u.s. with the max seven you've

got a twenty trillion dollar concentration problem and there's some cracks happening over there you

can buy the beneficiaries the picks and shovels at half the valuation so do you think i mean is the

corollary here that the the those leaders of the nasdaq are kind of capped out here or that they're

just not valued right for for the opportunity the risk reward is not skewed yeah uh... they they

they are probably within a twenty five percent band of fair value up or down sort of depends on

what happens at the fed on a given day and so on and so forth but you're sort of seeing it within

video he comes out with these massively bullish numbers and stocks were it was probably six months

ago uh... over in china over in parts of asia you saw what happened in korea over the last year there

was a little spark and the index went up a hundred percent uh... you've seen that with japan we have

some stocks in japan that on the year we're up a hundred percent so i think the risk reward is

extremely skewed last quick question are you short any of the u.s. major tech companies no i i think

they're not over value that i think they're within a band of fair value all right be neat thanks

for coming by hope to see you thank you next week be neat cut the re

i mean the recent market volatility net david's research is cutting its exposure to equities up next

the company's chief global investment strategist tells us what is behind that move and where he sees

opportunities right now and it's the end of an era again for tizzy ceo bob eiger a look back

at how the stock is fair during his second time running the media giant and over time returns

uh...

welcome back to over time to major media ceo's in the spotlight today according to a new filing

Warner Brothers discovery ceo david zazlov could be making as much as eight hundred eighty seven

million dollars from selling his company to paramount skydance more than six hundred

million of that would come from various stock awards but he could also potentially be reimbursed

for federal golden parachute tax that puts on the total payout to well over eight hundred

million dollars since becoming ceo of the company created by the merger of Warner media and

discovery four years ago the stock has jumped roughly twenty percent although most of that gain

is a result of the bidding battle between netflix and paramount meanwhile today is bob eiger's last

day is disney ceo and it's not the first time we've said that since is eiger's second time of

course as disney ceo he's being succeeded by josh damaro who is most recently the chairman of

disney experiences since returning to replacing bob a chapeck in november twenty twenty two disney

shares have increased by just nine percent yes i mean the backdrop for all of that is obviously

legacy media in a tough spot we have a company disney where the parks are doing fine but you're

leveraged to in theater box office plus linear cable so it's been it's been rough it's all

depend on like when you start counting in terms of whether you evaluate whether somebody's

added or subtracted value right and you take a look at his first term yes you know i'm assuming

that he wants his legacy to really to be found on that with some transformative m&a which really

was a departure from disney sort of style prior to that with michael isner i do think it's worth

remembering when he did get the job in a oh five i guess um disney was considered kind of like

you know directionless and it was a huge fight with michael isner and the whole idea of entertainment

franchises that kind of was an eager thing yes like we're going to cross sell this stuff he bought

lucas film as you have some picks are marvel now i think almost everybody would agree that disney

overpaid for the fox yes studio assets but almost anybody would have bought it in fact com catch

tried so right it's one of those things where and maybe there weren't that many easy answers

out of the the trap of declining and in the end it did get hulu so maybe that helps the

street yeah that's over time we'll see if that goes that pan out while airline stocks among the

big winners on wall street today after both delta and america and hike their revenue guidance

fill about spoke to the CEOs of both carriers he joins us with the details hey film

mike a day of positive comments from airline CEOs at the jp morgan industrials conference

we're not going to run down all of them but this is basically the message we heard across the board

during all of the president presentations here today in washington first of all yes fuel

costs are rising and it will show you how much in just a little bit but there's two base fair

increases that have taken place that has taken a bit of the sting out of those fuel costs increasing

and there is stronger than expected revenue that's the big takeaway from today talk about delta

you mentioned earlier that they've increased their guidance when it comes to revenue listen

to this delta CEO ad bastion told me this morning bookings are up 25% in the last couple of weeks

versus the same time last year american airlines when we talk to robberd isom he told us that q1

revenue is up it is expected to be up for the first quarter more than 10% compared to last year

and yes that's an increase compared to its previous guidance similar comments from alaska jet

blue southwest and united all seeing strong demand both domestically as well as internationally

and we mentioned jet fuel prices yeah they're up about 79% year to date but it's the crack spread

guys that's really where that's hitting the airlines hard it's not just that fuel our oil

prices have risen it's the crack spread for the refining of jet fuel that's really what's hurting

the airlines but so far it has not slowed down demand did they talk about how much diesel prices

would have to go in order for it to be then reflected in in the air fairs and at what point

they start getting concerned well it's already it's already partially reflected what you're

asking blissa is how high do air fairs have to go before we start to see some drop in demand and

nobody's going to get a percentage out there i think that we continue to see some air fair

increases here over the next several weeks especially if you see elevated jet fuel prices

clearly the consumers so far has said we will continue booking both leisure and corporate

and by extension fell i guess nobody's really getting scared away by the reports of very long

security lines and all the rest no it's frustrating the airline CEOs have said look this is

ridiculous and i don't think anybody would argue that this makes sense that the tsa agents are

not being paid because the department of homeland security is not being funded during this

government shutdown they are optimistic that something can be worked out relatively soon but nobody's

putting a timeline on this what you're going to see guys continued flare ups around the country

with the tsa calls hot spots where agents have decided they're either going to quit or they're

calling out because they're not getting paid and they're not going to have as many tsa agents there

and there's no way of predicting where that's going to happen it's happening Houston New Orleans

Atlanta on a fairly regular basis over the last week or two and it may be other airports it really

there's no way of predicting it are any of the airlines seeing any impact on demand for international

travel given the conflict in the Middle East no not and you would expect that Melissa we specifically

ask both Robert Isom and Ed Bastion are you seeing people deciding we're not going to fly trans

Atlantic for whatever reason that's a good region to focus on neither of them have seen any drop-off

in demand fill thank you fill a bow you bet all right our next guest is cutting his holdings

in stocks and moving that money into bonds instead he'll explain that move next on overtime

you

back to the broader markets ned Davis research turning a bit more cautious

is downgrading equities to a market weight.

As volatility picks up and breath weakens,

the firm is shifting money into bonds,

pointing to a spike in the vix that historically

has been part of a warning sign for stocks.

Joining us now for more on this market call

is Tim Hayes, Ned Davis Research Chief Global

Investment Strategist.

Tim, it's good to talk to you.

Last week caught up with you.

It felt like a lot of your indicators were kind of hinting

that you might be moving in this direction.

So what are your models generated that caused this move?

Well, that's right.

And what has happened since then is a breadth indicator

based on how many markets around the world are above

the 50-day moving average has really reached

just lowest levels since April of last year.

We've also had two other indicators give us warnings.

And these indicators are all in our global bounce count model,

which is something we really want to pay attention to

when you get into these periods of volatility.

And no shortage of uncertainty about the war and oil

and the inflationary impact and so on.

So we're going to pay attention to our indicators.

Half of them are price-based.

The other half are based on, we call non-priced factors.

So we've seen defensive relative strength,

that we've seen a sentiment of reverse from an extreme.

That's a signal we have gotten.

So those two indicators have given us a warning.

And other indicators are getting pretty close

based on earnings estimate revisions.

Those have started to roll over option-justed spreads.

Indicator has started to indicate that credit spreads

are starting to become, you know,

reflect the private credit concerns

and that indicator is getting close.

So our approach is, you know, we've got to market weight

and you know, we don't rule out the possibility

that, you know, the war ends, oil comes down,

volatility comes down again.

And this happens before the damage has become severe

in terms of inflation and interest rates.

That can't be ruled out,

but we also definitely can't rule out the negative potential

for yields to break out, say about 5% on the 10-year treasury.

Inflation expectations continue to rise.

This starts to have a bigger impact on earnings expectations.

And we start to see an impact on consumer confidence

and savings and the economy then starts to, you know,

show signs of this impact.

So until that becomes more clear,

our approach is to stay market weight, you know,

definitely, you know, take some chips off the table

and let's see how this develops.

If we're going to have a positive outcome,

then you would expect to see this breadth of the market

become much better.

So the market broads out.

You get what we call a breadth thrust volume

on the upside.

Stocks making new highs broadly

and not the kind of market we've been seeing here

the last few months.

Do you feel like screaming at the TV, though, Tim?

Oh, when you hear so many people say the markets are very calm,

you know, at the index level only less than 5% off of highs

and yet you're seeing all these indicators

by your measure rolling over.

Yeah, I think what it suggests to me

than one of the points I've made is that

when you get above 28, that is a warning sign

of what we saw in 21, 22 was the VIX,

you know, kind of kept making higher highs

as the market deteriorated.

And you really, if you're going to get to that kind of panic bottom,

you need to see levels of, we found around 44 under VIXs

is when it typically get a kind of panic extreme.

But yeah, I think that that to me is a concern

that you really have not had a capitulation

that you might expect given the environment we're in now.

And if it gets, you know,

if this lingers on like this,

and it's like it said, bond yields are pretty important to watch.

They break out.

You know, that could change things

and the model could very well move us to go into cash.

In fact, we run our indicators on a daily basis

and the bond cash composite,

what we do in our model is stock bond composite,

combined with the bond cash composite.

And that's starting to move more toward cash

as bond yields have started to give us those signals

that you want to be supporting duration.

Yeah, and we are showing that market weight

for you guys, 55% equities, 40% bonds, 5% cash.

You mentioned it's a global model

and so therefore you're looking at the behavior

of all world markets.

Is anywhere around the world distinguishing itself

as looking at all better than others?

Well, you know, we've been making the case for some time

that emerging markets, you know,

had really where we're seeing the strengths

and especially the emerging market, X China.

And so that takes out some of those big tech stocks

that have been cut up in the tech profit taking.

So emerging markets have held their own pretty well.

But all the uncertainty right now,

and they're still outperforming.

So that uptrend remains intact

and we're remaining overweight emerging markets

and we're underweight the US.

US has been in a long period of performance

really since the fourth quarter last year,

even going back earlier.

Tim, great to get the update, really appreciate it.

Tim Hayes, David's research.

Take care.

I thought it was interesting who's talking about the spike

in the Vex and thinking, what spike?

What spike?

We've only seen it in the beginning of the year.

It was a 28-day, and then it came

right back down.

It was our meeting, but it was there.

All right, let's get you set up with tomorrow's trade today.

It'll be a big day on the economic calendar

with the Fed's latest decision on interest rates,

a February producer price index,

and the January factory orders report.

And Micron is a headliner on the earnings front along

with Macy's, General Mills, William Sonoma,

as well as five below.

And speaking of earnings, let's check on the companies

that have reported results.

After the bell, we got Louis Levin beating earnings

in revenue, no updates on CEO search so far,

but adding that former Lee Vice CEO, Chip Berg,

is joining the board.

That stock is down by one and a quarter percent at this point.

DocuSign also beating on both the top and the bottom lines.

First quarter earnings guidance slightly above

the current consensus.

The company also announcing a $2 billion stock buyback.

The stock is off of its after-hours highs,

but still higher by about two percent.

And check out Bob's discount furniture

following after its first report as a public company.

We're not comparing the numbers to estimates

due to limited analyst coverage of the company.

The company went public on February 6th,

17 bucks a share, 14 change right now.

Gotcha.

Yeah.

And big day tomorrow.

Yeah, so of course, Fedmin tomorrow.

Yeah, you know, the bond market and my credit is right.

Sitting right at that level 420,

that's been a little bit of the demarcation line

between a problem and not.

That's going to do it for over time.

That's when it begins right after this quick break.

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