Market is overreacting to the CPI report, says Ally Invest's Lindsey Bell

BELL” MARKET ZONE, BREAKING DOWN THE CRUCIAL MOMENTS OF THE TRADING DAY. PHIL LeBEAU ON THE RALLY AND MARK MAHANEY ON THE LATEST MUSK/TWITTER DRAMA THE DOW UP 530 POINTS. WE’VE SURGED IN THE LAST TWO MOMENTS. THE S&P UP 2.1%. A HEALTHY RALLY. ALL SECTORS ARE HIGHER ON THE DAY. BONDS ARE RALLYING BITCOIN AND CRYPTO GETTING A BIG BOOST. BOTH PRETTY SKEPTICAL ON THE RALLY. ONE WORRIED ABOUT THE ECONOMY AND THE FALLOUT FROM HIGHER RATES AND JASON WORRIED ABOUT THE FED HAVING TO DO EVEN MORE AND SAYING THE MARKET IS TOO EXCITED OVER RATE CUTS WHERE

DO YOU STAND >> YEAH, LOOK, I THINK THIS POTENTIALLY COULD BE AN OVERREACTION TO WHAT WAS A PRETTY GOOD CPI REPORT WE DEFINITELY HAVE A LOT OF DATA BEFORE WE GET TO THE ACTUAL DECISION BY THE FED IN SEPTEMBER. BUT FOR TODAY WE’RE RALLYING AND I THINK IT’S REALLY BECAUSE INFLATION HAS BEEN SUCH AN OVERHANG FOR INVESTORS AND FOR THE MARKET AND I THINK WHAT INVESTORS ARE THINKING TODAY IS MAYBE THE PEAK REALLY HAS BEEN PUT IN THE PAST IF YOU LOOK AT CORE CPI, WOW, IT STAYED HOT AT 5.9%, STAYED STEADY IT HAS COME

DOWN IN MARCH OF THIS YEAR. WE MIGHT HAVE PEAK INFLATION BUT THE QUESTION IS WHERE DOES INFLATION GO FROM HERE HOW FAST DOES IT MOVE LOWER FROM

HERE WE’RE NOT PROBABLY GOING TO END THE YEAR 2% INFLATION. I CAN UNDERSTAND THE WORRIES OF BOTH STRATEGISTS YOU MENTIONED >> ELON MUSK SOLD ALMOST $7 BILLION WORTH OF TESLA SHARES. MUSK SAYING IN A TWEET THE FUNDS COULD BE USED TO FINANCE A POTENTIAL TWITTER DEAL IF HE LOSES HIS LEGAL BATTLE WITH THE COMPANY. HE HAS SOLD ALMOST $2 BILLION. JOINING US FOR MORE IS MARK MAHANEY. DOES THIS

MAKE YOU THINK THAT HE’S CLOSER TO HAVING TO BUY THIS COMPANY >> I THINK IT’S HARD NOT TO REACH THAT CONCLUSION. I’M NO LEGAL EXPERT BUT WITH ALL THE CHECKS WE’VE DONE ON IT IT WOULD SEEM TO APPEAR TWITTER IS A PRETTY STRONG LEGAL POSITION HERE THIS WILL ALL COME TO A HEAD IN THE MIDDLE OF OCTOBER, I THINK OCTOBER 19th YOU HAVE A JUDGE WHO HAS A CLEAR TRACK RECORD, A NO BS JUDGE, AND THE FIVE-DAY HEARINGS WILL DETERMINE THIS CASE AND SEEMS LIKE A REASONABLE ODDS ON OUTCOME. MAYBE THEY WILL STILL NEGOTIATE SOMETHING

BETWEEN NOW AND THEN IT DOES SEEM LIKE THIS DEAL WILL HAPPEN >> THE STOCK IS STILL $10 BELOW THE DEAL PRICE WHY AREN’T YOU RECOMMENDING IT IF YOU THINK THE DEAL WILL HAPPEN >> THESE ARE SO HARD TO PREDICT AND SO WE’RE OUT OF FUNDAMENTALS AND I TRY TO KEEP MYSELF IN. ON THE DOWN SIDE HERE, TOO, WE DIDN’T THINK THIS WAS GOING TO — WE DIDN’T THINK HE WOULD WALK AWAY FROM THE DEAL IN THE FIRST PLACE AND THOSE SHORT THE STOCK COULD HAVE MADE A LOT OF MONEY IF THEY COVERED AT THIS POINT.

I WANT TO THINK ABOUT THE DOWN SIDE, THOUGH IN THAT SITUATION WE NEVER KNOW WHAT WILL HAPPEN, IF THE DEAL WERE TO FALL APART, WHERE DOES TWITTER GO IT’S PUT THE STOCK IN THE MIDDLE OF THE UPSIDE AND DOWN SIDE. $54. IF YOU LOOK AT COMPS YOU COULD PROBABLY SEE $30 STOCK YOU ARE A LITTLE BIT ABOVE MAKING MONEY LESS DOWN SIDE ON THE UPSIDE CASE THAN ON THE DOWN SIDE CASE. THAT TELLS YOU THE MARKET IS THINKING THIS IS GOING TO HAPP