A Wavering Rally… And Headwinds For Airlines 3/23/26

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1:28about the study and what is next for the company. Plus, sports betting stocks get a bump. One top analyst cuts his price target on Microsoft. And the two auto stocks the chart master says are driving higher from here. We kick the tires on Toyota and GM later this hour. I'm Melissa Lee. Come to you live from Studio B at the Dazzle. I'm the best tonight. Tim Seymour, Karen Finerman, Guy Adami, and Carter Braxton Worth. We start off with the massive market rip that couldn't quite hold up. The S &P 500 gaining more than 2 % at its highs after President Trump posted on Truth Social that the U.S. and Iran held productive talks, but finished the day almost up about a percent.

2:05The Dow surging as much as 1 ,100, but cut gains nearly in half by the close. The Nasdaq and Russell 2000, similar votes there. Yields meantime dipped, gold slid almost 4 percent, and the dollar taking a leg lower. WTI crude settled 10 percent lower, but also off its worst levels, as investors wait for an indication that these talks could end the war. Our Eamon Javers is in Washington with the very latest on all of this. And maybe the market skepticism there, Eamon, is the fact that we don't know who the Trump administration is talking to. Yeah, we don't know that just yet, Melissa. And we saw today a senior Iranian politician responding on social media to President Trump's suggestion that the U.S.

2:44and Iran could share joint control of the Strait of Hormuz. Saeed Jalili wrote, they said, the Strait of Hormuz must be open. Then they said, I'll insure and escort the ships. Now they say I'm willing to manage it jointly with Iran. This, he said, is the very definition of a retreat. Iran's power has brought the United States to the table of realities. Then he put hashtag Trump at the end of Taco Trump there at the end of his social media posts. But President Trump told reporters today that he believes that Iran wants to make a deal to end the fighting. and he said follow-up conversations to this weekend's negotiations would happen as soon as today.

3:25They want very much to make a deal. We'd like to make a deal too. We're going to get together today by probably phone because it's very hard to find a country. It's very hard for them to get out, I guess. But we'll at some point very soon meet. We're doing a five-day period. We'll see how that goes. And if it goes well, we're going to end up with settling this. Otherwise, we just keep bombing our little hearts out. And combat operations are ongoing. CENTCOM put out a fact sheet today on the war detailing that U.S. forces have flown more than 9000 combat flights in the war so far, striking more than 9000 targets and damaging or destroying more than 140 Iranian vessels.

4:11Melissa, back over to you. All right, Eamon, thank you. Eamon Javers, what did you make at the action today? Tepid, I think, in a word, at best. And the bond market didn't react. I think what scared the administration over the weekend, if I had to guess, was the bond market on Friday and the global bond sell-off that's been going on now for the last couple of weeks. I think it's alarming. And 10-year yields got north of 4.45 percent, I believe, on Friday. And even with the move today, we're still north of 4.33. I think that's problematic. And I think that's sort of why things are sort of, at least they're trying to find some sort of elegant way out of this thing.

4:44Yeah, I agree. I think, you know, the bond market definitely forced a hand here and it does seem to be a little bit of deja vu. It is a case where Friday afternoon we had a conversation. Some of these different quotes came out right towards the end of Fast Money on Friday. Mel, we missed you. I missed you, Tim. And we were trying to parse for it without you. And ultimately, the message was one of clearly there's some sense that there is a policy response to a lot of different things. I mean, in support of at least what is should give equities more ammunition, that this isn't just about staring at the bond market or more more broadly that the U.S.

5:24has spoken to a number of different allies. There have been a number of different folks that have been involved in conversations that obviously have massive global implications. But if you bring it back to today's action, I would agree. I mean, the fact that the VIX day over day is only down 2 percent, I realize well off of some of the levels of Friday. But the dynamics here are important. The VIX went down to the 50 day. It bounced their key levels of support. There are key areas on the indices they've yet to get back up and over. And those are the 200 days. So the question. And it's great to have Carter here tonight because we can talk about what's technically changed, what kind of damage there's been.

6:01But great news for the world if we're moving in a way that at least has the proper denouement of this. But denouement, which is a fancy word, is also going to be. Do you know how to spell denouement? Well, if we were doing a spelling bee, I bet I could do it. But I think the most important thing is it's a complicated word. It's a complicated exit from all this. And I don't think it's going to happen overnight. Right. I mean, if the markets really, if investors really believed that there was the off-ramp insight and that the war was about to end, this would not be the reaction at all. I mean, it would be much stronger and it would last through the day.

6:38We're only back to where we were Friday morning. Yeah. Right. So earlier in the day, there was, I think, a 1 ,200-ish or so point. And, you know, the market was up much higher than this. there's a lot of concern that it's not looking as hopeful as we all want it to be. Right. I think most people would like to have a quick and safe exit. So, I mean, it's a nice bounce, but I think it reflects a great deal of skepticism. You know, we always talk about Trump uses the stock market as a proxy for how is he doing? And this would be, you know, not a strong, I think, reaction as he hoped. I don't also it seemed to be the the oil markets didn't fully take it in either.

7:22There was, you know, still they dropped. It dropped a lot. It dropped. It's losses by half. And then so the backwardation, I think, is there was all they were lower all across the curve, but not as much as one would hope. So I don't know. This is going to be more difficult to think to get out of than maybe we all hoped. So I don't know what to do. It doesn't change the way I invest, really. I do tweak around the edges in the VIX. Your point to the VIX, really, this was not a response like, oh, everything's great at all. It's still elevated, but I think it doesn't live here either. I think it probably goes up before it goes down.

8:00So if the stock market is President Trump's barometer, report card, whatever you want to call it, Carter, what is their prognosis? What do you see in here? Is there damage done at this point? Well, sure. I mean, the thing is that it's ongoing and it's been happening for months, right? At one point, it was thought that it was because of and still is AI, right? At one point, the thought was that it has something to do with oil. At one point, it has to do with rates. It's all of it. Valuations are high. We've come a long way from the sort of the lows of tariff. But the action day to day today in particular, you know, there's so many words.

8:42It's schizophrenic, right? It's impulsive. It's impetuous. The range alone in gold, just from the high above 100, I mean, oil, right above 100 to 84 gold, even more extreme rates, stocks, it's all being it's very reminiscent of I have a tariff. Now I'm not going to make you get a tariff. Now I'll give you half a tariff. It's all just on the words of one man. And that's not investing, right? That's just impulsive. And I'm not sure who's doing that. It can't be the biggest funds in the world lurching around. He said this. He said that. He didn't say this. He contradicts that. He's recanting this.

9:16It can't be that. But the total tone of it is unsettled, yes, uncomfortable. And I don't think it's the kind of thing that makes people embrace risk assets. The other thing that's important is at the end of every day, the day has to be called a bullish or bearish day. And one can say, well, we're up. So therefore, it was a bullish day for the S &P. But not really, because of what you all started talking about. It faded. It couldn't stick its landing. We closed at or near the low of the range. Tepid was one of the words used by Guy. But, you know, it's also feeble. It's sort of last guess. It just, or as you said, you were surprised, right, as a group, how little the reaction, if it was so clear, and I'll stop here, that this was the end, it was over.

9:58The market reaction sure doesn't suggest that. I mean, the semi-official Iranian news agency said there was no communication between the Trump administration, anybody in Iran. And then you had the politician basically, you know, hashtagging Taco Trump at the end of his posts on true social. There's a high degree of skepticism here on the part of the Iranians as well as here. I think one of the things I saw the only person the president speaking to is CNBC, which I thought was quasi amusing. But again, it speaks to if this was the only problem that the market was facing in the form. I'd say, you know what, maybe there's some light at the end of the tunnel.

10:30But unfortunately, I think this is one of many problems that the market's been facing. We wind up talking the most about for obvious reasons. But there are other things out there as well. The labor market seemingly is deteriorating. The bond market is clearly selling off. And I'm not sure exactly why. I think I do know this global debt problem is a problem. And it's not just the United States, the global yields as well. So if it was just the war, maybe I could see some green shoots. It's not just the war, though. I think the sentiment here is also not surprising. The market is echoing what we're talking about.

11:01But truly, investors look at today as an opportunity to hedge up. Investors look at today as an opportunity not to buy the dip. Investors look at today as an opportunity to really assess where there are parts of the market that are going to continue to probably be under duress. That's been the changing story here. It's not just that we think that the Fed is off the table or whatnot. But the protracted nature of this has allowed people to at least listen to companies that say, hey, you know, we're not totally sure where earnings are going to be out a year. But there's no question we are looking at the world a little bit differently.

11:34Already, we're going to have an earnings season, which suddenly is not that far away and is going to give corporate insight, corporate leaders, excuse me, C-suite a chance to look at their business and not have to be overly optimistic, especially when you compare that to we were talking about 15 to 25 percent EPS growth in 26. That justified a market that was trading at long term multiples that didn't really make a lot of sense. There is a free pass now to be cautious. There's a free pass to take down guidance to, you know, say a lot of things are unknown. So why wouldn't you take it? You would.

12:07I mean, we're going to start off with the banks. J.P. Morgan reports April 14th. I always like to get away from all macro stuff and see what's actually happening in the companies that make up the American economy. So J.P. Morgan is right at the center of it. They're going to be they always lean toward the more conservative anyway. Why not here? It's a free pass. What they cannot do is take charge offs, take take reserves that they don't yet need. They're not allowed to do that. Right. Because that sort of shields income. So they're not allowed to do that, but they can talk it down and they should talk it down.

12:44And so I think going into earnings, the setup might not be terrible. I'd much rather have the stocks be down than up. And I think the quarter is actually going to end up being OK. Maybe people won't care about the quarter that was then. This is now. It's a whole new world. But you're right. I think we'll see conservative all over. And a lot of companies will get a pass for that conservatism. For more on bonds and rates, let's bring in Jim Bianco, president of Bianco Research. Jim, great to see you. We're talking about yields and what yields are doing. They go higher seemingly no matter what the narrative in the war is.

13:16What is the story of the yields at this point? What is the bond market telling us? I think if you wanted to ask, do yields go up or down in general, you have to look at a measure called nominal GDP. That's real growth plus inflation, the two together. And I think what the bond market has been seeing here is a fear that we're going to get more inflation than we're going to get a hit to growth. and nominal growth is going to go up. That's why you've been not only seeing yields go up, but you've also been seeing all the rate cuts we were talking about disappearing. And now we're looking at the end of the year with small chances of rate hikes, not above 50%, but it was the day before the war, we were pricing in two rate cuts.

13:56Now they're gone. It's about more inflation than you will see in a slowdown in the economy. And frankly, it's not surprising because I was one like many others that this was a resilient economy, that it seemed like it was hanging in there and it was taking all the blows. And if it's doing that, then all we're doing is we're adding inflation to it. Jim, the dollar plays into this as well, and it's a global yield story. I mean, it's going around all over the world. But the U.S. dollar, the resilience and the strength over the last couple of weeks, is it a flight to safety or is it actually something other going on here?

14:30Is this a sort of a change in direction? Now, I think it's largely a flight to safety because you've also been seeing it with some of the other flight to safety instruments that I'm thinking like gold and silver and maybe some of the emerging market currencies as well going down. That people, you know, that whenever you get into a period of stress, it seems like it's an old joke, but it seems like global investors, step one, get all your money in the dollars and then step two, figure out what's going on. And that might be a little bit of what we're seeing right now with the strength in the dollar.

14:59So, Jim, then let's let's talk about the rest of the world, because this was a seemingly a brand new frontier and a golden road for a lot of investors over the last 15 months. But one of the first things we heard out of the ECB was a much more hawkish tone in terms of at least relatively relative to even what I think we heard from other central banks. BOJ finally has had a chance. This gets them in maybe off their the ledge of their branch to acknowledge that there's inflation out there. Are you more concerned about other parts of the world, which you and we have all discussed higher rates around the world have also been a magnet to pulling up U.S.

15:34rates? Oh, absolutely. Because before you go back to the day before the war, what we were talking about, we were talking about the rest of the world having an inflation problem. We were already pricing in rate hikes for Europe. There have already been rate hikes in Japan. That was before the war. Now you've exacerbated that trend. And now we're pricing in as many as three rate hikes for Europe going forward. So we're going to continue to see rates move up. What's going to change all of this is end the war, open the strait, get the ships moving. Then we could talk about where interest rates should settle down to.

16:11But until then, all the indicators are pointing at more nominal growth driven by higher inflation around the world and higher interest rates. So higher inflation, but not a real hit to growth, Jim. I mean, it's sort of a fine, it's like a tightrope here. So at what point do you think that we're pricing in inflation plus a hit to growth then, or a stagflation sort of environment? Well, if you wanted a roadmap for what we're talking about, we're talking about 2022. The same thing happened then. Initially, what happened was we had another shipping supply constraint. It was with container ships. Inflation started to move up.

16:50Yes, growth fell. We had a negative first quarter GDP in 2022. But we got way more inflation because it went to 9 % than we did with growth falling. And the Fed raised rates from 0 % to 4 % in a year. And interest rates went up three full percentage points, the 10-year yield did in 2022. Again, the same argument there is that you got more inflation than you got slower growth. So we've seen this story before, just four years ago. And it seems like we're starting to play that out. Now it's not container ships like it was four years ago. It's tankers that is causing this supply supply problem. Jim, great to speak with you as always.

17:29Thank you, Jim Bianco. Thank you. Bianco Research. How do you think about this? I think that we were already in a world also where we were seeing CRB and, you know, the commodity index, the commodity Ryan index, all these different input prices. I mean, look at where copper prices were before this. Dr. Copper was also one of the first things to get knocked down. And we all know there was a ton of speculation both in gold, gold miners, copper, copper miners. But, no, I think we had inflation. All right. We've got a news alert here that we do want to get to on Apollo. The company is saying in an SEC filing that it is capping withdrawals from its private credit fund as redemption requests hit about 11 percent.

18:10If we take a look at the shares in the after-hours session, And they're down by one and a half percent. Of course, this whole entire group has been decimated, basically, on fears about private credit issues, massive redemptions that would then fuel for sales of assets or sort of a I don't want to say a death spiral, but not a good cycle to be in. And the stocks traded in kind today. I mean, this the stocks Blackstone was down today. At the end of the day, I think Apollo was down. So maybe there was in an anticipation of something. Maybe something was leaked. However, it's not good. I mean, people get this.

18:42I'm not saying it's systemic. I'm saying it's problematic. And I think the banks are trading on the back of it that way. And I think, quite frankly, you're going to start to see it in the HYG at some point as well. So I think, you know, this cap was there 5 percent. And so it was well north of that 11 percent. So I think we'll just continue to see because if money's stuck, people panic, right? They don't like that. So I think we'll just continue to see it reach the cap for the next several quarters. Right. It has to work itself out. Right. And I think this is going to happen across across the entire spectrum until we have more clarity, which I don't think we'll have soon.

19:20It's certainly not on, you know, one of the fears is the software exposure and how that's going to play out. I don't think we'll have clarity for a bit. So I think we're going to be seeing this headline again and again, unless like Blackstone, you get more money in. Right. And whether it's from employees or whatever, and then you can meet redemptions. But I think I think the whole it's going to happen for a couple of quarters. Coming up, the outlook on Microsoft. What one top analyst says software stocks issues by their mounting. He'll join us next to lay out what he sees in store for the tech giant.

19:51Plus, sports betting stocks winning their latest hand against prediction markets. What's got these names riding a hot streak to start the week? Don't go anywhere. Fast Money's back in two.

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21:30Welcome back to Fast Money. Shares of Microsoft down more than 20 % so far this year, the worst performing stock in the so-called Mag 7. One analyst says the tech giant's issues could be mounting. Ben writes this. Amelius Research joins us now. He just cut his price target on the stock. Ben, great to have you with us. Hey, Melissa. How are you? So the crux is they have to fix Copilot. I mean, it was pretty in February when they said that they sold 15 million seats out of, what, a base of 450. That seemed kind of paltry. What can they do to fix it? Well, that's a question for them. They're not really telling anybody.

22:06But what they did is they reorg the division for Copilot. And now they have the guy that was running it working on models. That's a red flag. I mean, you rarely reorganize anything into strength. And look, all over your network all day, they were talking about this call. And one person after another was talking about, you know, a funny experience with Copilot. it. We all know it's a little bit of a punchline. So I don't think Satya is really happy with it. And I think that the reorg signals two things. Obviously, they're not happy. But two, with Mustafa going to focus on models, they're going to have to spend more on their own models because sharing IP with open AI is not working out too well.

22:50So the street might get negatively surprised on higher R &D, higher CapEx coming, which hits free cash flow. And then that all hits on depreciation. So we have to see if there's any margin upside for this company actually, given the footfall in Copilot. Will they still be able to keep up their Azure revenues as they are working more intensely on their models? Will they be using some of that capacity themselves? Not only that, they'll be using, they're investing in their own models, which ups R &D, and then they have to use more internal capacity. God forbid people start using this thing, because then they got to inference, and that's going to take more capacity.

23:32So it's like damned if they do, damned if they don't, because we got to have a lot of capacity coming online, because they're going to have, if they fix Copilot and actually get people to pay for this, which I'm still not thinking is going to happen. I don't know anybody that's really getting people to pay extra for AI. But anyway, then they actually get people to start using it. Then Azure upside will be less than people think because it's going to consume more of Azure unless they get tons of capacity online faster than expected. Ben, it's Karen. Thanks for being on. Do you extrapolate anything to the other hyperscalers either that Microsoft's troubles is good for them or anything from that?

24:16I think Google and Amazon are going to crush their cloud numbers over the coming quarters. I think that they have a lot of spigot. Their spigot is coming from the open, the anthropic spigot is coming through their pipes, more so than Microsoft's. And that's been an exponential on the exponential of the growth in recent months, in recent weeks. And then you're going to see that in the upside of their cloud revenues more than Azure, because Azure is not going to have the capacity to show the upside. Now, the Azure growth is going to be great. It'll be maybe in the high 30s, but it'll be hard for them to put a four in front of that number consistently, while Google's numbers and maybe even Amazon's as we go throughout the year systematically beat and can even beat whispers.