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tv   Closing Bell  CNBC  April 1, 2024 3:00pm-4:00pm EDT

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tonight. >> go, hawkeyes. i'm going to say it. i can't believe it. >> that was interesting. i'll be watching tonight. >> absolutely. >> it will be a very interesting game. >> she's very compelling to watch and awesome for women's sports. >> playing the defending champs, who are very good. very tough. thanks for watching "power lunch," everybody. "closing bell" starts right now. >> all right, guys, thank you so much. welcome to "closing bell," i'm scott wapner live from post nine at the new york stock exchange. this make or break hour begins with the rally and the risks to your money. earnings season, soon to heat up, and that will likely hold the cards for stocks in the near term. we're going to ask our experts over this final stretch whether they'll live up to the hype. in the meedium, take a look at your scorecard. some pretty good economic data this morning. that sent yields higher, pushed stocks down. that's where they are right now. there's the ten-year, 4.33%. the nasdaq's been trying to make a move all day as microsoft, meta, and alphabet rise. elsewhere, really only energy doing anything as last month's
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best trade looks for more momentum in the quarter ahead. it does take us to our talk of the tape, whether a historically good month will play out that way for investors. let's ask adam parker, the founder and ceo of trivariate research. with me once again at post nine. >> good to be here. >> new quarter, same story for the rally? what do you think? >> we looked back -- our data goes back to 1928 in our database, and there's been 12 times previously where we had double-digit returns for the s&p in two straight quarters. we were up 11 in q4 and 10 in q1. i said, what happened in the quarter after that? if you look back, the average is it worked another 4% on average and only one time were you down double digits, q3, 1975. so, the data is not a massively statistically significant sample size. >> it's not an exact science or anything, but the trend is your friend. >> 9 out of 12 times, it was up.
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only one time it was bad out of the previous 12 years. history doesn't say, oh, i had two great quarters, let me throw everything out. i would say, you know, the trend's your friend, and i think this week's big if we get any negative prereleases. i don't think we're going to, but everyone dots their i's, crosses their t's, and maybe wednesday or thursday, you get a little revenue guide down. i don't think that's what's highest probability. >> how are you thinking about rates and stocks? you had the better data this morning, and the ten-year goes to 4.33%. and stocks are a little uneasy. isn't there a point at which stocks don't want to handle the back-up in rates once again? we don't want to be talking about that again, do we? >> i want to change my mind on that every day. i want to say, good news is good. bad news is bad. if the economy is good, the ten-year backs up a little, the stock market goes up, corporate earnings are good, that's how you learn in the textbook. it's only in the last 13 years
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we've all been messed up by fed intervention that we think it only can be good when rates go down, right? today, it's interesting. the market's not having a great day, but tech, which you would think is more rate sensitive, is fine. i think we can handle higher rates as long as the economy is decent, but i don't know what the magic cutoff is, if it's 5 or something like that. today surprised me a little bit. >> you've called the broadening pretty incredible, right, that we've seen in the market. it's been extraordinary, really, that, you know, finally, all these other areas beyond tech over the last month, let's say, the month of march, i mean, tech was like sixth or seventh in performance. does that continue? >> i think, if you're bullish, it will. if the market goes up, it will. i don't think, you know, that small caps outperform in a down tape. so, to me, the reason things are good is financial conditions are very easy. if you look at any sort of standard financial conditions index, this is about as good as it gets. it's in the top 5% of easiness,
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so the small caps shouldn't have problems accessing capital. their margins can go up. and that's why it's broadened. if you get tighter financial conditions, if the economy slows, then i think you narrow back to the ones you're confident in the growth trajectory. >> i heard somebody use the word goldilocks earlier. economy strong. we know the fed's going to cut at some point. earnings are probably going to be decent. is that what you -- would you use that word? >> yeah, decent. i think that's right. >> i mean goldilocks. >> well, yeah. you had two double-digit return quarters. the fed is saying they're going to be accommodative. you got to dance when the music's on. does the fed somehow, you know, really get people thinking -- look, the worst thing is you start being afraid we have stagflation later this year. you get a little bit of pickup in inflation, economy slows, and that's where you get the double-digit correction in that month. right now, that doesn't look like something you should position for. and i think there's lots of portfolio strategy. you can own a.i.
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you can own accelerating software. you can own electric of industrials. i can own health care services for cost-cutting. i see lots of things i want to own. >> let's talk positioning. you just used that word, so let's go there. you have some new positioning calls in terms of what you've done in various sector weights and what you've increased and decreased. you reduced your weight in health care, utilities, staples, so that -- you've reduced defensive plays. obviously. real estate and discretionary, by 1%. >> yeah. >> you've increased exposure to tech. you've increased exposure to materials, financials, industrials. so, you're definitely getting more cyclical. >> yeah. look, our tech -- when you're s&p benchmark, you own twice as much tech as anything else. if you like a.i. semis, we talked about it for over a year, you like accelerating software, you're going to own a lot of tech. you own a lot of mag seven. so, the question is, how do you
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balance that? i think energy and materials are a good balance. i think financials, we have a market weight, but i didn't want to be underweight. i think they're pretty good risk-reward, a lot of shareholder return. i'm not exactly sure what interest rate environment i'm rooting for. that's the only thing that worries me. if the economy is good, and that's what the stock market the last two quarters is telling you it's going to be, banks tend to do okay. >> they've done okay off the lows of october 7th, and i think they're still pretty cheap. there's plenty of banks i can buy at ten times earnings. >> the problem is a lot of these banks, the bank stocks of jpmorgan and others, are at new highs. that doesn't make you nervous going into earnings season? >> maybe, but there are things like truist, don't have -- have pretty good geographic footprints, don't have cre exposure. >> like super regionals. >> yeah, i think there are some of those that are pretty good. when the stock market is at an all-time high, then it stands to reason that a lot of stocks will be at an all-time high. >> you increase your exposure to tech by 2%.
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you had already been advocating that you got to be overweight tech. so, i mean, we're talking 25 to 30% of exposure in someone's portfolio to tech, and you're sorted of even above that. >> we're at 28% now. we went from 26 to 28% in the recommendations. you know, i just think, there's multiyear trends we're in the early phases of. i want to own software that has accelerating revenue. i want to own semiconductors with expanding gross margins. i want to own market weight in the mag seven, some of which are in tech, some in comp services, but when you add that all up, you're going to be -- you're going to have a quarter plus of your portfolio in those names, so how do you diversify? you got a own a little health care, cyclical stuff like energy and metals, which is a little bit diversifying today, which is positive for the portfolio construction. the thing i'm most negative on at the current moment, based on what's worked, is physical u.s. retailers. when i look at the components of
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the xrt, i see tons of stocks that are up a lot. i don't know if abercrombie and fitch is an a.i. stock all of a sudden, but last i checked, they sell clothing. target is something i think is overvalued. i can't find any stocks in my database that have lower margins, grow more slowly, and are more expensive. >> you would short some of those names? >> i would. i think that this is the least believable sustainable part of the growth story. i'm willing to believe we need more compute with a.i. we need more industrials with electrification. we need more housing. there's things -- i know health care companies can be much more profitable in terms of their productivity. there's things i can dream that might happen six months from now, might happen in five years. what's the dream? i'm going to sell more stuff at target? >> how would you play the consumer, experiential and travel? >> i think you have to be underweight. sure, high-end travel holds in
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because, you know, the upper 10% are inelastic to hotel pricing and the like. you haven't seen great data out of, you know, the booking companies over the last couple quarters, so cruises, et cetera, so some of that is slowing a little bit in the middle end, but i don't think you want to own target or ulta or, you know, dick's or the things that sell things in physical boxes. >> hasn't target already gone through these trials and tran tribulations? >> it's up 60%. >> but look how far it fell. >> i'm paying 19 times 9 bucks, what am i looking at? i comp negatively in the store. i comp negatively online and don't add new boxes. every hedge fund guy i talk to says, i short melting ice cubes. you got a giant one in front of you. it's overvalued because everything worked. when people say the fed is going to cut, the playbook says, buy discretionary. i don't see any fundamental follow-through.
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with the other things we talked about, housing, electrification of industrial semis, i've seen follow-through. >> you wouldn't buy cost ko? >> costco is a little bit different. harder to sell on amazon. 50% of the operating profit comes from the annual fee. the poster child would be like tgt. >> let's bring in shannon of enby private wealth. glad to have you on today. we have a new quarter. what's your view? >> adam said a lot of great things there, but i think there's a couple of things that i really want to drive home as we go into the next quarter. clearly, we've seen a little bit of weakness here, scott, more recently in that momentum factor, and i think that's an important sign for people that are looking for the continuation of the rotation. momentum was really leading the trade, and when it was technology and communication services, so it's really opening up the avenues to some of this diversification, some of this dispersion, if you will, in the
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underlying sectors. i think the other thing to remember is that as we're going forward, you talked about rates earlier. rates as a sort of a near-term, transitory mover of stocks, that's one thing. expectations, to your point about the fed pivoting, is another. our view is that's not going to happen. some of this incremental move, if you will, in rates may offer some opportunities both on the equity and the fixed income side, frankly, to manipulate your positioning. but i think more importantly, this is really about the potential for the re-acceleration of inflation. i think growth has a foundation here. we looked at the economic data that's come out over the last couple of days. it seems like the growth story is intact. so, the question's now going to be for sort of macro thinkers, does this lend itself to a re-acceleration of inflation? perhaps in the short term, but it's likely transitory. >> i feel like you guys would disagree on positioning in terms of when you're watching the momentum trade. we're speaking about tech and
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some of these growthier names. here's adam, increasing his exposure to an already-bullish stance, right? he takes it up from 26 to 28%. and i almost hear you suggesting that you would take your exposure to that area down, is that right? >> well, thematically, adam's not wrong. on a longer term basis, there are drivers for that. from our perspective, there's opportunities outside of kind of mega cap technology to be able to take advantage of the productivity enhancement, to be able to catch this theme, if you will. i think more importantly, scott, it's less about how you feel about the technology sector, whether you're neutral or slightly underweight or slightly overweight. it's really about how you're positioning within that sector. there are clearly some winners and losers this year, even in those top names, and so, being able to position for that, but also allowing you the capital to potentially get some insulation in a more volatile rate
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environment but also to pick up some growth in other sectors. the economic picture is allowing you that right now, scott. it's allowing you to see names like materials, for instance, that are trending quite strongly as we enter into the second quarter. >> yeah, but she's also looking for, as you clearly hear her talk about the idea that rates are going to be a little sticky, that inflation is at risk of, you know, reigniting or at least just remaining where we are, which would be problematic in some respects, right? the fed is going to kind of banking on this number and getting down to target. >> yeah, i don't see -- first of all, of the people that i go on with, shannon is one of my favorites, because she usually makes total sense to me, and if i disagree, i understand why. >> does she make sense in your view? >> she makes sense to me here again in that i think the debate is just, we have growth now. does the growth turn into the stagflation fear i briefly mentioned? if it does, i think we're going
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to get a selloff. if we start getting worried about, i guess, as she put it, a nontransient increase in inflation, and the fed says, forget a combination, we might hike it up a couple times, then i think we all agree -- >> forget it? >> but i think for now, the growth's in the lead, and that's why. look, i think what i focus on every day, can gross margins for the average stock expand? if they can, and i still dream of a combination some day, that is the goldilocks you talked about earlier. margins are going up. >> can i -- >> shannon, yeah, just a second. your -- i don't want to say entire, but 90% of your bullish occasion of what you've articulated to me here, appearance after appearance after appearance, margins. you think that margins are going to tell the story this earnings season. >> i think if margins go down, stocks go down, and if they go up, they go up, and if i can dream i have a combination plus
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margin expansion, that's why we're up double digits the last couple quarters. >> shan? >> and i don't actually disagree with that. i think margins are critical, but scott, the challenge here is that there's a lot of opportunity outside of mega cap tech for margins to improve and earnings to reaccelerate. earnings may still be strong for mega cap tech, but that's going to decelerate, potentially, over the next couple of years, so if i'm looking at some place we're going to see margin expansion or multiple expansion, excuse me, multiple expansion will come outside of those names. >> where? >> that's why i think this diversification -- sectors like health care. we talked about this earlier. health care, industrials, financials. you talked about banks. there are opportunities for multiples to expand, and there's less vulnerability outside of mega cap tech. i don't disagree that those earnings can continue to be strong. but the -- but they don't have to -- they're not going to be accelerating as broadly as they are in other sectors. >> yeah. >> you just took your exposure to health care down. >> yeah, but we're already -- we went from very overweight to a
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little bit less overweight. energy and health care are our two biggest overweights, so i just thought we were a little out over our skis, but i agree with her there. >> where is energy on your list? it was the best performer in march. >> we have been and remain overweight in energy and health care. i still really like energy. if you have any investors who aren't worried about this month but are looking out sort of 12 months, 18, 24, i can't see why they wouldn't be massively overweight energy. we do not have enough supply to meet what's a certainty of demand, and i like that it's got low correlation to the a.i. trade and other stuff. i'm going to be hedged. there's days when some of the tech stuff acts bad and energy is great, and the portfolio recommendations can still beat the s&p. the goal for us, and i think shannon's the same, you want to have a portfolio that overperforms in up tape and down tape. we're 28% tech and 7% energy, and we're more overweight energy than we are tech. that's just how the s&p's constructed. >> shannon, last word to you.
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>> listen, we're right before earnings season, so these nermz couple of days, there may be macro blips, if you will, but i think we're looking at earnings to continue to see in the second half of the year, will we get the guidance to be slightly better to account for the fact that earnings estimates have come down a little bit in the first half? >> guys, i appreciate your time. >> good to see you, shannon. >> bye. >> shan, thank you. adam parker, thanks to you as well. >> take care. disney's big board battle entering its final stages, and some are saying this week's vote could be quite close, maybe closer than expected a couple weeks ago. cnbc.com's alex sherman is here to discuss what's at stake. that's sort of where we've progressed, right? we're hearing this could be a lot closer than people thought. >> i think originally, after disney's last quarter, it seemed like bob iger and the board were in the -- the shares popped. they sort of threw out a whole bunch of different things in
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terms of what the future of disney might look like, new announcements, and investors were pleased. what i think we've seen more recently, though, is that -- maybe hinging on the iss and even jones' recommendations just in the past week or two that recommended nelson peltz, in fact, be voted on to the board, is that the focus has turned to succession, and i think that's a much stronger argument for trian and an activist slate. it's hard to argue that disney has nailed succession. bob iger has pushed back his retirement five different times. he has actually walked away from the ceo job and handed it to bob chapek. that turned into a borderline disaster. and now, he's back as ceo, and there's no clear succession candidate. so, this argument that peltz getting on to the board can act as a sort of adult in the room when it comes to succession may be fairly persuasive to shareholders. >> what happens if disney loses, do you think? what does it mean for iger?
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look, iger has said he's leaving as ceo at the end of 2026. some people believe him, some don't. at this point, you know, if peltz gets nominated to the board, i suppose you could say investors have said, look, enough is enough now. we need to get serious about this. we need to pick a real successor. you need to leave, and we're going to turn it over now to not necessarily someone else, because nelson peltz is just one person, and even if jay rasulo gets voted on to the board also, that's just two people on the board. i think it would be a sign that would say a lack of confidence, a no-confidence vote in the disney board, at least when it comes to that. i think it's a weaker argument for peltz to say, i know the direction that disney should go in more than bob iger. and look, even nelson peltz says, i still want bob iger to be the ceo of this company. even he is not making that argument. but at least when it comes to succession, i think it would have a vote where you would have to say, look, bob, we've given
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you a chance here. we need someone else in here because we don't trust you alone, even in conjunction with the board at this time. >> i mean, mr. iger himself would say, i agree with you that we need someone else in here eventually, right? when he's ready to step away. that's part of where your reporting lies today on cnbc.com, correct? >> yeah, look, the board and bob iger have been looking at internal candidates really since he's come back, i've been told, in late november of 2022. i wrote a profile of dana walden, who was one of the favorites to take over for iger. she has led up the disney tv division for the past several years, and i'm told internally from people that work at disney that at least some of them feel like she's actually the favorite to get the job. that may be proximity-based. i also have heard similar things about etta parks for people that work in the parks division. dana walden has been successful as a tv executive. can she make the leap to ceo?
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i think that's why there's no clear favorite at this point, because whether you're talking about jimmy pitaro or josh or dana walden, you can find flaws with all these candidates. there's no obvious answer here, so there's going to need to be a leap of faith, either on an internal candidate or external candidate, and that's part of nelson peltz's argument about why disney's board has failed when it comes to succession planning. >> alex, i appreciate your time. thank you. check out his article, by the way, on cnbc.com. that's alex sherman. we're just getting started on "closing bell." up next, top wealth advisor cheryl young is breaking out her q2 playbook, revealing where she's seeing strength. we're live from the new york stock exchange. you're watching "closing bell" on cnbc.
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not all caitlin clarks are the same. caitlin clark. city planner. just like not all internet providers are the same. don't settle. you want fast. get fast. you want reliable. get reliable. you want powerful. get powerful. get real deal speed, reliability and power with xfinity. she shoots from here? that's kinda my thing. we are back. stocks starting off the second quarter under a little bit of pressure today as bond yields spike, and some of the market's momentum winners take a bit of a
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breather. our next guest, still finding upside in a number of sectors that hit new highs just today. top wealth advisor cheryl young of the rockefeller global family office is back at post nine. good to see you. >> thank you, scott. >> so, you were positive on the market before many. so, here we are. we're in the midst of what's been an incredible move. now what? >> that is the question. we're kicking off the quarter today. it's an exciting day to join you, scott. we're starting to see broadening. you look at the equal weight index, s&p is only up 2.8%. we're seeing the broadening you and i spoke about in january take hold, and i'm optimistic that will continue but concerned about some overbought areas. >> why do you think the broadening is going to continue, first of all? >> well, first of all, there's more trades than one stock. the number one performer in terms of the s&p 500 is 25% of the returns. 25% from one name. >> who would that be, nvidia? >> i can't talk individual names. we were concerned last year, as
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you know, that 32% of the returns came from seven stocks, and that was horrific. so, i would just like to think there's other places to invest. when you see a table in vegas, and i'm not a vegas girl, but if you see a table that's crowded, we call it a hot hands fallacy in behavioral uhheuristics. the markets can and should broaden from here. >> it was either the last time we spoke or perhaps the time prior where you were getting nervous about valuations on mega cap. i remember the conversation that we had. so, if that was you then, where are you now? >> so, in january, i started selling calls on a lot of these names in the magnificent seven, 10% "on the money." now, some of those names are in the money, and i'm going to be really happy if i get the 14% i have remaining in terms of the call income for the year. 14%, i'll take all day long. i don't see how this market goes up 14% from here, especially on the mega cap techs. >> do you think we've gone up
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too far too fast overall, or does this just make sense to you? we're expecting rate cuts. the economy's strong. there are many reasons, bulls would say, to be bullish. >> yeah, and i think it's -- i think it's a good reminder to have a pause. first of all, we are still expecting rate cuts, but there are some questions around how many. i know in january, we were saying six, and i was, like, two, maybe none. i'm still saying two, three. maybe none. i think it will happen. but the data is good. look at the pmi numbers this morning. >> i know. that's one of the reasons why yields went up and stocks got a little skittish for a moment. >> anything above 50 signals expansion. when we have data coming in this strong, the job numbers are good, the industrials are good, i just don't see how the fed cuts rates in june. >> is that a problem if there are no cuts this year? or is it -- you're shaking your head, yes, so that still matters more than the strong economy. some would say, well, the economy's this good, we don't need rate cuts. >> i would argue the stock
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market started rallying in december when the fed appeared more accommodative. >> there's no doubt. the pivot sort of set the whole thing off. >> the pivot set the tone. if that doesn't happen, i would have to believe the stock market has some cooling off to do. >> even if the economy is stronger now than it was then or at least we thought it was, part of the belief was, well, the economy's got to cool off. so, we're going to need rate cuts in addition to the fact that inflation's coming down. they're going to be able to cut for the right reasons. >> remember, not all the stock market has participated. last year, it was technology. and nothing else. year to ate, we have seen other sectors start to lead ahead of technology, which is -- we talked about in january when i was here about how this pivots into other sectors. >> like energy, which was great last month. >> industrials, materials. i still like. i still really like financials, and i like health care. we have not seen as big of a rally in some of these sectors, energy is behind where it was three years ago. there's a lot of catch-up to do. again, i would say, look at the market in terms of not
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necessarily broad indexes, but which sectors can work? what's going to work well with the a.i. trade and support the a.i. trade? again, energy. has to be energy. that's the biggest bottleneck when we think about a.i. expansion, and we have an election this year, which would benefit sectors like industrials. >> you have to be reasonably broadly bullish if you -- if you like all of those sectors. that's almost the whole market. if you like tech a little bit less, but you still like it. >> i don't like real estate, for example. not keen on that area. that's worked out well for me. i've had no exposure, thank goodness. >> that's one, right? you like energy. you're adding more to utilities, as you said, industrials, materials, financials, and health care. >> trimming technology, which, by the way, the first time i've ever been on your show was the last two times where i said i'm trimming technology, and five of the magnificent seven have underperformed the s&p. so, i think that can continue. i'm not excited about hardware right now.
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i hate to say it. i like some areas in technology. i like a.i. still, but be careful. maybe add -- we talked about my rock-climbing. as i climb up the wall, i like to add just a little bit more protection into the wall, make sure if i take a fall, it's a small fall. i want to continue to think about using options, because i don't want to create taxes. remember, i'm not just a portfolio manager. i'm a wealth manager. if i sell all of these magnificent names in my portfolio, i'm going to crush my clients in taxes. so, can i hedge them with some options in creating some ability to keep those names? maybe there's some upside. but if there's not, i'm going to get 12 to 14% income on the off chance. i'm okay with that right now from here on out for the rest of the year, frankly. >> what about small and mid caps? we'll make that the last one. >> yeah, i like small and mid. maybe a little bit more than adam does. i think, again, there's some opportunity there. you have to be careful. again, the russell 2000 has a lot of regional banks. >> yeah. >> a lot. and so, that's why -- >> biggest weighting, i think,
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is made up of regionals. >> it's why it suffered this year. we had a nice return on small caps in december. they were up, like, 12%, i want to say. i think there's legs in that area. but again, be picky about what you own. >> okay. that's the bottom line statement for everything. be picky about what you own. always enjoy the conversation. thanks for being here. cheryl young, joining us at post nine. up next, top technician jeff degraaf is back. the one sector he says about to break out. were you worried the wedding would be too much? nahhhh... (inner monologue) another destination wedding?? we just got back from her sister's in napa. who gets married in napa? my daughter. who gets married someplace more expensive? my other daughter. cancun! jamaica!! why can't they use my backyard!! with empower, we get all of our financial questions answered. so we don't have to worry. can we get out of here? i thought you'd never ask. join 18 million americans and take control of your financial future with a real time dashboard and real life conversations.
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oo the s&p 500 kicking off the quarter but pulling back from record highs. our next guest says the technicals suggest momentum hasn't been exhausted quite yet. let's bring in jeff degraaf, chairman and head of technical research at renaissance macro. good to see you again. i was going to say, we're about as overbought as overbought can be. or at least it seems that way. but you say not exactly quite yet? >> well, yeah. i would say, not exactly quite yet. if you look at the percentage of issues, they're above their 200-day moving average, it's right around 82%. that number can get a lot higher, obviously. people have a tendency to worry about that number when it is over 80%, but all our work shows that that's a sign of momentum, where you really want to be concerned about the overall market is when that line's
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contracting, say, you know, 75 from 80 and the market's still going up. that's a sign that you start losing the participation. so, the ascending -- that ascending reading, actually, us is good news. the tiptop of momentum, the highest momentum names have come under some pressure versus the low-momentum names, hasn't been bearish for the market, but it usually implies there's an expansion going on, and that tends to have durability. i think we're still in pretty good shape. >> there definitely has been a broadening, but what about the momentum trade in and of itself? what are the charts telling you about its future? >> yeah, so, the last time i was on, we talked about getting into the 90th percentile, and we got to the 94th percentile back last week, and so for us, that's a pretty stark yellow flag that we raise up the pole and say, hey, this isn't really how we want to be positioned right here. so, look for some of these laggards to kick in, and that's
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what we're seeing out of copper, little bit out of energy. some of the other material names, some of the chemicals, et cetera, starting to perform a little better. so, i think momentum will take a pause. the very high momentum names will take a pause. but that should force the money down to the lesser aggressive names, and i think that's going to end up being good news. still, and i think it's very obvious what's going on, still with this bias towards cyclicality. it's not people fleeing, say, discretionary on their way to procter & gamble or a bunch of the staple names. they're actually looking for some other type of cyclicality that they can get exposure to, and a lot of those are showing up in materials. >> i was going to ask what you make of the materials more broadly. it's been one of the better performing sectors, and we know gold's hitting a record high yet again today. how much room does that have? >> i think gold has another 20% in it, believe it or not. i think gold is the real deal with this breakout. i like it. the positioning, we look at
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small traders through the cftc, this is not being driven by the retail crowd. some people would look at that as being a contrarian indication. that historically has held up statistically, so these are big money buyers pushing this higher, and i think that's got some duration. the physical looks a lot better than the equities. much more a fan of the physical gold market than we are the underlying stocks in gold. but copper, really, to us, is the more interesting play here, because we're seeing the breakout in those names. i think there's kind of a global element to this of an improving economy, maybe not so hot that it's detracting from some of these other areas that people can make money, but certainly shows that this whole concern, which i think has been modify pretty aggressively about recession, really is back of the back burner. >> what about energy? leave us with a good thought here, because it's ripped.
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obviously, best performer in march by a lot. >> it's a hard one. momentum is good with energy. that's okay. but the trends on a relative basis still aren't there yet. we'd stick with the transport names, stick with the marketing names, the big integrated still don't look that good to us. i'd rather steeryou towards materials than i would energy, but if you have to be in energy, stick to the smaller cap names, and those with the strong relative performance trend to be transports and marketing. >> even with the kind of momentum this space is showing? we've learned our lesson about, when momentum gets going, it's hard to break. this space was up 10% last month. >> yeah, so, you'll get a pause or consolidation. our -- the hardest part that we have for energy right now is it really shouldn't be doing that well in our market cycle clock, and so it's just kind of doing well, it shouldn't be doing well, so we'll have symptom expo --
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some exposure, but we don't make big bets. we're far more aligned with materials. >> maybe china picking up a little bit, too, helps that. jeff, we'll see you soon. that's jeff degraaf. up next, we're tracking the biggest movers as we head into the close. kristina partsinevelos is standing by with that. >> media company that has a valuation of over $6 billion but still expects lawsuits for the foreseeable future. shares are tanking. can you guess which firm? details are next. at corient, wealth management begins and ends with you. we believe the more personal the solution, the more powerful the result.
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we're about 15 out from the closing bell. let's send it out to kristina partsinevelos. >> the roller coaster ride continues as trump media and technology group sinks more than 20% after the social media company reported a $58 million net loss in 2023. this came from the company's 8k, and in that filing, they said they expect "to incur operating losses for the foreseeable future." the move does come after a multi-day rally just last week after the stock began trading, ipo'ed on tuesday. keep in mind, this company has a valuation of more than $6 billion, down 20%, trading at $49.29. shares of 3m on the rise after the manufacturing company announced its spinoff of health care company solvatem was completed.
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they announced a settlement with public water suppliers in a chemicals lawsuit. that's why you're seeing shares up almost 6% right now. >> all right. back to you in a few. still ahead, a chip check. micron shares are moving higher. and how the rest of the chip space is reacting. "closing bell" is coming right back.
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>> announcer: the market zone is sponsored by e-trade from morgan stanley. all right, we're in the "closing bell" market zone. cnbc senior markets commentator mike santoli here to break down crucial moments. plus, kristina partsinevelos with a big call on micron and the chip name shaking off this market weakness. and courtney reagan looking ahead to pvh and those results coming out in overtime. the first day of the second trading quarter, assess it for us. >> just a little bit of recoil from some of the action that closed the first quarter, and specifically, there was a bit of this move, rebalancing out of stocks into bonds, we've gotten that reversed today. but we've been greeted by further evidence of a more resilient economy. we're still growing. 5%-plus nominal gdp. earnings, revised lower in the first quarter at a slower than normal pace. it's really hard to, if you go looking for faults or things though worry about, all i really
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come up with is, it's been too good for too long. and markets don't go in one direction indefinitely like this, and you have to be careful that the macrodata and treasury yields don't kind of go out of the guardrails of this zone that's been very comfortable for the market for months now. >> well, i mean, just that jobs report on friday. i mean, here we go again with a report where we're going to watch every little tick, and we're going to decide whether good is too good is too good, whether, you know, yields move up on a better report and stocks get unsettled. >> that is definitely a chance of that. i'm more focused on the market action itself almost being too good. the amount of rotation and dispersion in the market is protecting the index from every potential little buffer. you haven't had a 2% pullback. maybe we don't get one for a while. the market is acting exactly like it has in some of the best years ever. even there, you have a bit of a rethink of the ideal macro
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scenario. >> kristina partsinevelos is watching the chips today. there's a lot of talk about what these stocks are going to do in this quarter ahead, and not a great day for the market, but no big deal for the chips, apparently. >> no big deal for micron. it's one of the biggest s&p 500 gainers today, and that's driven partially because of a b of a analyst raising its target to $144. they said high-bandwidth memory, which is critical to the a.i. systems that we keep talking about, is taking up all the supply, and micron is going to be the main beneficiary of that. they bet the high-bandwidth memory market will grow to $27 billion by 2027. it's not all about gpus. that's driving micron shares to an all-time high. we do have other winners. taiwan semiconductor, tsmc, up almost 4% right now on a report from china's commercial times that suggests tsmc is going to increase its capex guidance to keep up with demand for
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high-performance computing chips, particularly with a.i. you can sense a theme here, and since i'm talking about a.i., let's talk about microsoft and openai discussing plans for a $100 billion a.i. super computer called stargate which would require, according to this report, millions of server chips to power the super computer. it's unclear in it's going to be benefitting nvidia, amd, or in-house chips from microsoft, but in that report, openai reportedly told microsoft, it does not want to use -- i should say, nvidia's cables and would rather use ethernet cables, and that could benefit broadcom and arista networks. the next major a.i. upgrade is expected early next year. >> kristina, appreciate that. mike, this is going to be a closely watched sector all quarter long, given what these stocks have done, and it's not just an nvidia story. >> no, not at all.
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every time you plausibly wonder if the market has sort of overdiscounted the fact that there's going to be this rapid you are generate buildout, you have one of these reports that says, actually, we need even more. for now, i think the market is buffered against that concern. huge question is whether there's a payoff for everybody, you know, spending all this money to build out right now. that seems like the market's treating it as tomorrow's problem. maybe we do get a splash of cold water on this in terms of the overall opportunity. but for now, as long as they're buying gear, it even goes into the power generation areas of the market. you see copper moving the way it's moving. and so, it is animating a lot of different parts of the market. >> yeah, no doubt about that. court, what do we need to know about pvh? >> scott, there's always a lot of good read-throughs because of this parent of tommy hilfiger and calvin klein and others. it has licensing partnerships.
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shares have well outperformed the main retail etfs, the xrt, xly over the last three months. it's also outperformed the s&p 500. dd cowan analyst john kernan tells investors consensus is underestimating pvh's ability to elevate its brands, he thinks the european margin opportunity also is underappreciated, and he notes that it's calvin klein digital engagement north america hit its highest level in five years in january. options implying a move of about 10% on earnings, so we'll see what happens here, but i really like the read-throughs for the consumer around the world, globally, of course, what we're seeing right here in the united states. and i expect a note of caution because of that. >> we'll see in a couple minutes in overtime. courtney reagan, thank you so much for that. mike, back to you. nasdaq, very interesting today, given the overall tape and some of these large cap tech names that are green. >> yeah. it shows once again that is not a really directly interest rate sensitive part of this market.
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it is doing a little bit of outperformance on a day like today. it's just driven, as we were saying, by other, you know, themes and story lines, and that makes some sense in the short-term. i do notice, if you look at what's dragging the dow down today, things like home depot and goldman-sachs. the energy -- i mean, the interest rate sensitive parts of this market, the cyclicals, they really ramped into the close of trading for the first quarter. you probably need another day or so to see if a lot of this is just, you know, the spillback from the portfolio rebalancing we did last week. see if yields catch a flight. as much as we can say that much of the market is not that yield sensitive, this market could find an excuse in yields breaking out above the top of their recent range to say that we have to at least have a rethink. >> lot of talk about the market being overbought, but degraaf doesn't think the momentum is done quite yet. >> yeah, it's overbought for sure, but the question is, what does that actually translate into? it doesn't mean it's likely to go down. it's more likely a sign of
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ongoing strength, at least in the coming months. >> all right, mike, appreciate it. see you tomorrow. we'll go red on the dow and the s&p. nasdaq's going to fight it to the last moment to try and stay green. don't fert orget about pvh comi in. i'll send it to morgan and jon. ♪ well, looks like a mixed picture for stocks, but the s&p starting april in the red after it closed q1 with the best quarterly returns since 2019. that is the scorecard on wall street, but the action is just getting started. welcome to "closing bell: overtime." >> major arcverages under pressure. comp services and energy were the bright spots. coming up, steve sosnick lays out his investing playbook for april and beyond.

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