RUSH TRANSCRIPT That s ░░░░░░░░ sandler We ll see ░░░░░░░░ again soon in a ░░░░░░░░ another sharp investor will ░░░░░░░░ us Nancy Davis she ░░░░░░░░ in how to play ░░░░░░░░ you think that s ░░░░░░░░ story these days she ░░░░░░░░ one of the best ░░░░░░░░ of the past few ░░░░░░░░ not all that long ░░░░░░░░ which is while we ░░░░░░░░ ask her what she ░░░░░░░░ now and where the ░░░░░░░░ opportunities lie We ll ░░░░░░░░ her in just a ░░░░░░░░ minutes Now we bring ░░░░░░░░ our panel More actionable ░░░░░░░░ to have today gregory ░░░░░░░░ and high tower chief ░░░░░░░░ strategist and CNBC contributor ░░░░░░░░ link good to see ░░░░░░░░ of you today Gregory ░░░░░░░░ ll begin with you ░░░░░░░░ sounded obviously a little ░░░░░░░░ cautious he thinks that ░░░░░░░░ gains today are not ░░░░░░░░ to be the gains ░░░░░░░░ so to speak What ░░░░░░░░ you think I think ░░░░░░░░ that caution is warranted ░░░░░░░░ think these market levels ░░░░░░░░ anticipating a quick resolution ░░░░░░░░ the geopolitical conflict right ░░░░░░░░ and they largely shrugged ░░░░░░░░ what the Fed did ░░░░░░░░ said yesterday if James ░░░░░░░░ had his way he ░░░░░░░░ obviously have 50 basis ░░░░░░░░ and we only got ░░░░░░░░ so that was something ░░░░░░░░ a relief but we ░░░░░░░░ likely looking at the ░░░░░░░░ break being at one ░░░░░░░░ 75 this year That ░░░░░░░░ raising at each of ░░░░░░░░ next meetings I think ░░░░░░░░ s underappreciated what s ░░░░░░░░ to happen as they ░░░░░░░░ the balance sheet reduction ░░░░░░░░ will likely start in ░░░░░░░░ just as ricky was ░░░░░░░░ at the end of ░░░░░░░░ day when we are ░░░░░░░░ in liquidity that led ░░░░░░░░ asset price inflation which ░░░░░░░░ likely candidly underestimated looking ░░░░░░░░ inflation to reach 7 ░░░░░░░░ year end last year ░░░░░░░░ turned out to be ░░░░░░░░ I never would have ░░░░░░░░ the market ended where ░░░░░░░░ was because I underestimated ░░░░░░░░ Fed put which I ░░░░░░░░ largely think now is ░░░░░░░░ I don t think ░░░░░░░░ have a policy to ░░░░░░░░ rescue arrow in the ░░░░░░░░ anymore I think that ░░░░░░░░ inflation continues to persist ░░░░░░░░ it does which I ░░░░░░░░ is possible and likely ░░░░░░░░ we ll reach 9 ░░░░░░░░ the next month or ░░░░░░░░ I don t believe ░░░░░░░░ will be a quick ░░░░░░░░ lugolution so commodity pric ░░░░░░░░ rise If we re ░░░░░░░░ at 112 per barrel ░░░░░░░░ the second quarter we ░░░░░░░░ going to have continued ░░░░░░░░ inflation combined with a ░░░░░░░░ fed which historically has ░░░░░░░░ to a recession or ░░░░░░░░ bear market this current ░░░░░░░░ level is not pricing ░░░░░░░░ in I think your ░░░░░░░░ has a different take ░░░░░░░░ Stephanie sflinglink you have ░░░░░░░░ constructive in the market ░░░░░░░░ in the face of ░░░░░░░░ and that was before ░░░░░░░░ strung three decent days ░░░░░░░░ do you have a ░░░░░░░░ view Yeah I think ░░░░░░░░ s a lot of ░░░░░░░░ s a lot of ░░░░░░░░ in the economy right ░░░░░░░░ when you look at ░░░░░░░░ consumer you look at ░░░░░░░░ you look at wages ░░░░░░░░ 2 6 trillion in ░░░░░░░░ savings you look at ░░░░░░░░ and starts the housing ░░░░░░░░ you talk to lunar ░░░░░░░░ horton they have good ░░░░░░░░ to say about the ░░░░░░░░ of the housing cycle ░░░░░░░░ production is running up ░░░░░░░░ 5 and that s ░░░░░░░░ the face of higher ░░░░░░░░ chain problems The Philly ░░░░░░░░ was really good toof ░░░░░░░░ claims are coming down ░░░░░░░░ could list a whole ░░░░░░░░ of things and the ░░░░░░░░ we re still going ░░░░░░░░ have buttast least we ░░░░░░░░ one of the three ░░░░░░░░ past us or at ░░░░░░░░ somewhat resolved We don ░░░░░░░░ know if the Fed ░░░░░░░░ engineer a soft landing ░░░░░░░░ the fact they re ░░░░░░░░ to say they need ░░░░░░░░ tighten 11 times they ░░░░░░░░ they re behind the ░░░░░░░░ and they re going ░░░░░░░░ take action I think ░░░░░░░░ re going to do ░░░░░░░░ and be more data ░░░░░░░░ at least we kind ░░░░░░░░ know let s put ░░░░░░░░ to the side now ░░░░░░░░ have geopolitical issues and ░░░░░░░░ course we do have ░░░░░░░░ and I don t ░░░░░░░░ think the 11 hikes ░░░░░░░░ they do do it ░░░░░░░░ solve inflation We need ░░░░░░░░ chains to get better ░░░░░░░░ they will eventually but ░░░░░░░░ s much too much ░░░░░░░░ in the economy that ░░░░░░░░ do not think we ░░░░░░░░ going to see a ░░░░░░░░ situation or a recession ░░░░░░░░ ll leave it there ░░░░░░░░ appreciate your time very ░░░░░░░░ we ll see you ░░░░░░░░ Still ahead in overtime ░░░░░░░░ volatility playbook quadratic capital ░░░░░░░░ Nancy Davis joins us ░░░░░░░░ made one of the ░░░░░░░░ trades over the past ░░░░░░░░ years not all that ░░░░░░░░ ago She has a ░░░░░░░░ eye for volatility she ░░░░░░░░ share her best ideas ░░░░░░░░ you next Plus the ░░░░░░░░ trade One top money ░░░░░░░░ making a big bet ░░░░░░░░ the reopening where she ░░░░░░░░ seeing opportunity here we ░░░░░░░░ tell you in the ░░░░░░░░ minute trill before we ░░░░░░░░ out of here today ░░░░░░░░ you can catch us ░░░░░░░░ the go dct Poas ░░░░░░░░ is back after this ░░░░░░░░ can t buy love ░░░░░░░░ Or confidence But you ░░░░░░░░ invest in them At ░░░░░░░░ rowe price our strategic ░░░░░░░░ approach can help you ░░░░░░░░ the future you imagine ░░░░░░░░ machine printing Who would ░░░░░░░░ thought printing Could lead ░░░░░░░░ growing trees I didn ░░░░░░░░ know my genetic report ░░░░░░░░ tell me I was ░░░░░░░░ to harmful blood clots ░░░░░░░░ travel a ton so ░░░░░░░░ info was kind of ░░░░░░░░ changing Maybe even lifesaving ░░░░░░░░ you know what the ░░░░░░░░ holds Welcome back we ░░░░░░░░ an o t alert ░░░░░░░░ U S Steel That ░░░░░░░░ is under pressure take ░░░░░░░░ look at that It ░░░░░░░░ down 3 75 The ░░░░░░░░ is updating its guidance ░░░░░░░░ projecting earnings of 2 ░░░░░░░░ to 3 a share ░░░░░░░░ s for the quarter ░░░░░░░░ s below the expected ░░░░░░░░ of what was 3 ░░░░░░░░ 3 78 so guidance ░░░░░░░░ little light stock getting ░░░░░░░░ little lighter as we ░░░░░░░░ here in overtime as ░░░░░░░░ 33 35 down 3 ░░░░░░░░ Time for a CNBC ░░░░░░░░ update with Shepard Smith ░░░░░░░░ Frau the news on ░░░░░░░░ here s what s ░░░░░░░░ the house voted in ░░░░░░░░ past hour to suspend ░░░░░░░░ trade relations with Russia ░░░░░░░░ its ally Belarus That ░░░░░░░░ the way for higher ░░░░░░░░ on imports from both ░░░░░░░░ those countries The vote ░░░░░░░░ bipartisan with only eight ░░░░░░░░ against T it still ░░░░░░░░ to pass the Senate ░░░░░░░░ re expected to take ░░░░░░░░ up soon The wnba ░░░░░░░░ brittney griner will be ░░░░░░░░ a Russian prison until ░░░░░░░░ least may 19th Russian ░░░░░░░░ media announced the court ░░░░░░░░ today Russian authorities arrested ░░░░░░░░ last month at a ░░░░░░░░ airport Authorities say they ░░░░░░░░ hash oil vape cartridges ░░░░░░░░ her luggage And 400 ░░░░░░░░ proof vests destined for ░░░░░░░░ stolen from a New ░░░░░░░░ nonprofit police released surveillance ░░░░░░░░ showing groups of people ░░░░░░░░ up to the facility ░░░░░░░░ stealing the boxes full ░░░░░░░░ vests That gear donated ░░░░░░░░ police departments in the ░░░░░░░░ York City area officials ░░░░░░░░ they were going to ░░░░░░░░ sent to security and ░░░░░░░░ teams inside the war ░░░░░░░░ Tonight several hundred students ░░░░░░░░ morehouse college got a ░░░░░░░░ surprise on graduation day ░░░░░░░░ 2019 their entire student ░░░░░░░░ was wiped clean So ░░░░░░░░ we ll check in ░░░░░░░░ some of them to ░░░░░░░░ how big of a ░░░░░░░░ that gift made in ░░░░░░░░ lives on the news ░░░░░░░░ after Jim Cramer 7 ░░░░░░░░ eastern CNBC Back to ░░░░░░░░ We ll be there ░░░░░░░░ vix hitting its lowest ░░░░░░░░ in a month today ░░░░░░░░ it is just north ░░░░░░░░ 25 Let s bring ░░░░░░░░ Nancy Davis chief investment ░░░░░░░░ of quadratic capital management ░░░░░░░░ the portfolio manager for ░░░░░░░░ quadratic interest rate volatility ░░░░░░░░ inflation hedge etf Welcome ░░░░░░░░ nice to see you ░░░░░░░░ Scott great to see ░░░░░░░░ congrats on your new ░░░░░░░░ Thank you so much ░░░░░░░░ having you on this ░░░░░░░░ week you have been ░░░░░░░░ for more volatility it ░░░░░░░░ has been more volatile ░░░░░░░░ question is what happens ░░░░░░░░ Let s look forward ░░░░░░░░ you still Yes definitely ░░░░░░░░ think interest rate volatility ░░░░░░░░ s equity volatility so ░░░░░░░░ thing for your viewers ░░░░░░░░ anything with an options ░░░░░░░░ has a vol market ░░░░░░░░ are lots of different ░░░░░░░░ out there and I ░░░░░░░░ interest rate vol especially ░░░░░░░░ the U S with ░░░░░░░░ unknown monetary policy with ░░░░░░░░ balance sheet and fiscal ░░░░░░░░ is a pretty good ░░░░░░░░ I think it s ░░░░░░░░ good buy right now ░░░░░░░░ allowed to give financial ░░░░░░░░ but I think as ░░░░░░░░ asset class it looks ░░░░░░░░ attractive Yeah what do ░░░░░░░░ make of what the ░░░░░░░░ had to say the ░░░░░░░░ forward whether they re ░░░░░░░░ to be able to ░░░░░░░░ what the market has ░░░░░░░░ in or not and ░░░░░░░░ how that ultimately impacts ░░░░░░░░ vol picture Well the ░░░░░░░░ are already priced in ░░░░░░░░ nothing really changed with ░░░░░░░░ s forward guidance He ░░░░░░░░ already tightened the rates ░░░░░░░░ because the hikes had ░░░░░░░░ priced in already I ░░░░░░░░ the thing that was ░░░░░░░░ unusual was dancing around ░░░░░░░░ balance sheet and not ░░░░░░░░ talking about it it ░░░░░░░░ kind of kicking the ░░░░░░░░ down the road a ░░░░░░░░ bit I think that ░░░░░░░░ the elephant in the ░░░░░░░░ and how they let ░░░░░░░░ roll off or unwind ░░░░░░░░ have never had you ░░░░░░░░ the qt happen before ░░░░░░░░ quantitative tightening so it ░░░░░░░░ a good time to ░░░░░░░░ fixed income volatility in ░░░░░░░░ Beyond buying let s ░░░░░░░░ talking your own book ░░░░░░░░ I fall and I ░░░░░░░░ understand why you would ░░░░░░░░ people may want to ░░░░░░░░ that you also have ░░░░░░░░ way of playing the ░░░░░░░░ yield curve that may ░░░░░░░░ a counterintuitive way of ░░░░░░░░ at it Is that ░░░░░░░░ Yes that s our ░░░░░░░░ etf That s also ░░░░░░░░ volatility long fixed income ░░░░░░░░ but it has exposure ░░░░░░░░ the long end of ░░░░░░░░ curve in case the ░░░░░░░░ hikes a lot like ░░░░░░░░ s priced in that ░░░░░░░░ actually cause the economy ░░░░░░░░ slow and go into ░░░░░░░░ of more of a ░░░░░░░░ style recession So that ░░░░░░░░ another strategy that we ░░░░░░░░ to offer to investors ░░░░░░░░ on their view on ░░░░░░░░ market We had Jeffrey ░░░░░░░░ here with us to ░░░░░░░░ to the Fed He ░░░░░░░░ gives actionable ideas Will ░░░░░░░░ listen to what he ░░░░░░░░ yesterday about his own ░░░░░░░░ and more specifically to ░░░░░░░░ vix I would like ░░░░░░░░ get your reaction to ░░░░░░░░ Here s Jeffrey I ░░░░░░░░ just gotten to the ░░░░░░░░ in my career where ░░░░░░░░ have seen this movie ░░░░░░░░ many times When the ░░░░░░░░ gets above 35 I ░░░░░░░░ t care how bad ░░░░░░░░ tape looks how bad ░░░░░░░░ look you re supposed ░░░░░░░░ get more bullish What ░░░░░░░░ you make of that ░░░░░░░░ don t know if ░░░░░░░░ ll get back to ░░░░░░░░ or not it sounds ░░░░░░░░ you think we may ░░░░░░░░ what do you think ░░░░░░░░ the vix is just ░░░░░░░░ volatility specifically S P ░░░░░░░░ dated volatility it is ░░░░░░░░ volatility is very mean ░░░░░░░░ so I would agree ░░░░░░░░ Jeffrey that having the ░░░░░░░░ tens to mean revert ░░░░░░░░ it does spike It ░░░░░░░░ just one type of ░░░░░░░░ out there The thing ░░░░░░░░ knows really well is ░░░░░░░░ investors are actually short ░░░░░░░░ income volatility naturally in ░░░░░░░░ portfolio from their exposure ░░░░░░░░ mortgages If you think ░░░░░░░░ if you own a ░░░░░░░░ mortgage the homeowners homeowners ░░░░░░░░ the ones who are ░░░░░░░░ the option to prepay ░░░░░░░░ they want They call ░░░░░░░░ convexity correction or prepayment ░░░░░░░░ which is just a ░░░░░░░░ way of saying short ░░░░░░░░ and it s actually ░░░░░░░░ income volatility that most ░░░░░░░░ are short naturally What ░░░░░░░░ though and gundlach by ░░░░░░░░ way had a view ░░░░░░░░ the two year might ░░░░░░░░ topping out shortly as ░░░░░░░░ and Scott Minerd was ░░░░░░░░ this week you re ░░░░░░░░ about keen bond minds ░░░░░░░░ maybe the 10 year ░░░░░░░░ in a range of ░░░░░░░░ to 2 25 that ░░░░░░░░ was too topping out ░░░░░░░░ happens in terms of ░░░░░░░░ kinds of strategies you ░░░░░░░░ recommending our viewers pursue ░░░░░░░░ strategies are really agnostic ░░░░░░░░ the level of interest ░░░░░░░░ we re another kind ░░░░░░░░ spread product We gain ░░░░░░░░ to the spread between ░░░░░░░░ rate differentials so it ░░░░░░░░ t really matter necessarily ░░░░░░░░ interest rates are whether ░░░░░░░░ re 2 or 5 ░░░░░░░░ 1 it s really ░░░░░░░░ the spread between short ░░░░░░░░ long dated rates that ░░░░░░░░ provide access to We ░░░░░░░░ going to see what ░░░░░░░░ Nancy Davis I ll ░░░░░░░░ you again soon Thank ░░░░░░░░ Scott.
>> Take care