Closing Bell - Best Day For Stocks Since November; Former Bridgewater Chief Investment Strategist On the Fed, Gold’s Surge 03/14/25

Episode Date: March 14, 2025

Citi U.S. Equity Strategist Scott Chronert and Interactive Brokers Chief Strategist Steve Sosnick analyze the market’s latest moves. Former Bridgewater Chief Investment Strategist Rebecca Patterson weighs in on the Fed, gold’s surge, and currency markets. D.A. Davidson Managing Director Gil Luria breaks down Microsoft’s bullish call and what it signals ahead of Nvidia earnings. Mercer US Chief Investment Officer Olaolu Aganga shares insights on market volatility. Plus, our Kate Rooney on Y Combinator’s latest cohort and how AI is reshaping the startup landscape.

That Bell marks the end of regulation. Oh, I glass we're gonna close in Bell at the New York Stock Exchange Red River Bank shares doing the honors at the Nasdaq But it's a green river for equities on the screen as stocks finish the day near the highs with energy and tech seeing the biggest bounce Back though the major average is still logging steep losses for the week. Well, that's a scorecard on Wall Street, but winners stay late Welcome to closing about overtime. I'm Fort. Morgan Brennan is off today. Coming up this hour, former Bridgewater Chief Investment Strategist Rebecca Patterson weighs in on today's bounce, and if it's the start of a more sustainable rally for stocks.

Plus, is the worst over for the Magnificent Seven. Big Tech rallying today, and D.A. Davidson just upgraded one of the Mag-7 names to buy. We're gonna talk to the analyst behind that call. Let's start with the market rebound. Another big point swing for the Dow, which has had a roller coaster week, sinking 890 points on Monday, down 478 on Tuesday,

losing 83 on Wednesday, falling 537 points on Thursday, before climbing, see, more than 670 points today. It looked like we were close to, yeah, 674, let's say. I think it's settled. Let's bring in City US equity strategist, Scott Cronert, and Interactive Brokers Chief Strategist, Steve Sosnick. Guys, happy Friday. Scott, is today's bounce convincing?

Can people buy next week? Well, I think it certainly sets the tone here. Earlier this week on Monday, we suggested 5,500 is a pretty good risk-reward line in the sand, if you will. And what has happened is that you've gone to classic oversold conditions, even though our sentiment indicators are still slightly in euphoria. But all told, what I think you've done

in a very short order is washed out a lot slightly in euphoria, but all told what I think you've done in a very short order is washed out a lot of the euphoria around the mega cap growth space, which is corrected quite significantly more so than the index. What this does is begin to set up for a view where we think as we go forward we're going to continue to contend with concerns regarding economic softening, but this mega cap growth cohort can begin to step back in and a growth is defensive sort of play. Okay.

Well, Steve, what about the bad, frankly, consumer confidence numbers out of you, Michigan, this morning? Is the market still sensitive to bad news or is it a good sign that people seem to have shrugged that one off? Hi, John. I guess it is a good sign that they were able to shrug it off. I think today it was more about, you know, as Scott mentioned, bouncing off some oversold conditions. It was a day that we didn't have any tariff news,

which I think the market was kind of thankful to, you know, to not have to reckon with that sort of stuff today. We also did sort of potentially dodge a government shutdown. Those are all reasons why it made sense to be on a good footing. I was a little surprised that the rally just shrugged off those terrible consumer confidence numbers. They have been a huge player in why we've been seeing some rocky markets in here. A lot of this stuff is spilling back to the consumer, but today, that was not about it. You also remember had a Friday expiration of weekly options and that can also turbocharge a rally once it gets going.

Okay. Now, Scott, you mentioned the big tech. Nvidia actually had a good week overall, unlike the major indices, but it's also got a big week next week with GTC. How influential do you think Nvidia is gonna be with its news next week? So, John, our concern with Nvidia has been simply that it's been relying on a beat and raise dynamic with estimates for the past six months and has been laboring along that, right? But what you've done with this recent stock price setback,

you know, where you've sold the stock off, what, over 20% from peak to recent trough, is you begin to take some of that expectation out. So you get yourself to a point now where a reconfirmation that underlying trends are in place might just be sufficient to give the stock some renewed energy, at least on the short term. Okay, so Steve, taking a step back

and looking at what we've been through this week, really this year, I guess, or at least since February 19th, let's say this month, should retail investors adjust their eagerness to take on risk chasing returns? I think this was a wake- up call for a lot of investors. And I think this, you know, I think the simplest way to answer that question is,

give a rubric for individual investors to do it for themselves. And that is, were you freaked out over the last couple of weeks? Were you freaked out this week? If so, you're carrying too much risk. If you saw this as sort of a normal correction within the course of a longer bull market and a setback, but maybe a temporary setback in your plans, well, then your risk tolerance is different.

I think that's really the way you have to go about things. This doesn't mean necessarily head for the hills. On the other hand, it's also important to remember that some of the biggest rallies occur during downward markets. Bear market rallies are actually the biggest, but we're not in a bear market as of now. That's the gut check you need to do. I think if you're blindly buying stuff just because it's down, that's a mistake. If you're buying stuff because you say, all right, it's on sale, I liked it at the first

price, all the fundamentals still add up. I can get a good stock at a discount. Then you want to be going in, but don't overshoot your risk tolerance. And it makes me wonder, Scott, if some of the old rules need to come back, diversification, selling some of your winners every once in a while so that you got dry powder when the market takes a downdraft? Yeah, I mean, look, going into the year, we were pretty clear with our playbook. We expected first part of the year volatility,

specifically around Trump policies as they unfolded in the first 100 days. And that was all reflected in our base case of 6,500. So our view all year long has been, let's look for some volatility in here be prepared to buy into said weakness we're getting that now and what's happened along the way though just to come back to this mag seven influence is that they're all down much more than the market they've really corrected some of the valuation issue and

implied growth issue that was at work going into the year. So I do think the setup right now is you can begin to come back to U.S. equities with a little bit more comfort that you've right size valuations on that mega cap growth cohort and the rest of the market is actually holding in pretty well you got health care up in the

year energy supply surprising benefit. So all told yeah we think that this is a better risk reward set up That said, the real discussion point is going to come as we get into Q1 reporting period. We'll start to hear more companies talk about how they're thinking about the tariff dynamic, even though we don't really have strong policy declarations just yet. And I think what we have to expect, which we're already beginning to see, is a downward bias of revision.

So I'm not looking for a V-shaped recovery here. Saying the risk reward is pretty good to start coming back into equities, but we're gonna need to base build for a while. All right, we got a week ahead to look forward to. Scott, Steve, thank you. Thanks, John. Now let's get to one of the big winners of the week.

Gold trading above $3,000 an ounce for the very first time. Pippa Stevens has more on this historic move, Pippa. Coming down a little bit here as you see there, but still crossing above that psychologically important level thanks to market volatility coupled with recession, trade and inflation fears, all of which is sparking a rotation into gold, traditionally seen as a safe haven asset.

Gold is now on pace for its best week since November and up 13% on the year, with more than half of investors surveyed by Bank of America saying it's the quote best hedge against a full blown trade war. TD securities Daniel Golly noting that a unique setup has allowed prices to shrug off rising rates of strong dollar and volatility across asset classes. First, demand for gold as a currency depreciation hedge. And second, western speculators entering the market. He added that macro funds still have scope to deploy even more capital. McQuarrie sees the gains continuing with gold rising to 3,150 by the third quarter, with the potential to hit 3,500,

saying that for the time being, there are no clear signs of froth in the market, leading to a higher for longer price environment. The gold miners also tracking for their best week of the year with names like Newmont Wheaton Precious Metals, and Barrett Golds all in the green. And this, John, was Gold's 11th record so far this year.

Mike Santoli was pointing out earlier today on CNBC how this year Bitcoin and gold have really headed in some pretty different directions. Gold, the traditional store of value. Have you seen anything that gold is sort of correlated with in this environment or is it just back to gold standing on its own? I think one of the unique things about this time around

is that gold doesn't always have an allocation, a correlation rather, with other asset classes. And so that's why I think maybe right now we're seeing all this renewed interest, precisely because it can trade on its own. And now we've seen inflation fears and then also all of the trade war uncertainty, tariff uncertainty and what that might mean

for demand and economic growth. And so that's why I think that people are pivoting here. But also last year we saw kind of for the first time a younger generation embracing gold. After Costco started selling those gold bars, we saw that trend kind of blow up on TikTok and Instagram with millennials and Gen Z getting involved too. So while Bitcoin was traditionally seen as, you know,

kind of the safe haven asset, that was maybe tested a bit. And now when things are really uncertain, we're going back to the basics and picking up gold. Gen Z's got a Costco card now huh? Alright, go Gen Z. Pippa, thanks. Alright, now let's get to the aforementioned senior markets commentator Mike Santoli for a check on where markets stand after this week's wild ride. Mike? Yeah, John, standing on somewhat firmer footing today than they had been most of the week. This is what that bounce today looks like though in a one-year chart The yellow line is the 200-day moving average

So still there's plenty of of proving to be done here that this rally is more than just a reflex bounce That's about less than 2% up from here is that 200-day average? 5900 which would be another couple percent up from here is another level that would Sort of make that this was more than just a reflex bounce. So we did get that 10% peak to trough decline. You went back to levels from really late last summer. So a lot of things came together to suggest that things had gotten overdone in the short term but still plenty, I think, to prove for the market going into next week.

Take a look at a vision of the credit markets here the high-yield ETF HYG it really held up quite well relative to similar maturity treasuries That's the IEI right here. So this is a proxy for risk spreads in the credit markets So you were able to say hey, you know what the credit markets are not really too upset about this mini pullback in the stock market That suggests that macro stress is not building too fast. But then high yield prices did crunch in the last couple of days. It seemed like it was a bit of a capitulation by that group of investors. And then you got this rally in treasuries as well.

Today a little bit affirming in the riskier credit. So it was just another sign that a lot of folks had their conviction tested by this downturn and we're still having to ask the question, is this a macroeconomic event? Are we in for a real deep slowdown or is it really just market mechanics working against the investors in the short term, John? Mike, we just got a little bit more than two weeks before April 2nd and tariffs are going to be top of mind again heading up to that date.

And then I guess we got another jobs report just a couple days after that. That'll be quite a bit for the market to react to, no? Well, without a doubt. It's hard to envision that the market is going to kind of be operating on a very long leash until we get to April 2nd, unless there's some preview announcement that maybe we're going to moderate the tariff in position. I would say the Fed meeting next week though keep in mind how that

could change investor psychology a little bit if the Fed I don't know that they will but if they make any noise about looking through potential price increases from tariffs and being more concerned about the downside risk to the economy

that could be taken by a market that's already pulled back as suggesting that you know know, even if there's not a Trump put nearby below us in price, that maybe the Fed put can sort of show up there at some point. Yeah, maybe the tariff price increases would be transitory. There you go. That would be the bet. Maybe they'll say that. Mike Santoli, see you again in just a bit. Coming up, former Bridgewater Chief Investment Strategist

Rebecca Patterson is going to join me with her take on the volatile market. Gold's March above 3,000. And the surprising currency winner so far this year. And later, the magnificent seven name that D.A. Davidson just upgraded to buy. Analyst Gil Luria joins me with the stock to buy on the dips.

Overtime's back in two. Welcome back to Overtime. Stocks closing higher today. Best session since the day after the election. Still lower for the week and the month as tariff fears and growth slowdown concerns weigh on investors. Joining me now is Rebecca Patterson. She's a senior fellow at the Council on Foreign Relations and former chief strategist at Bridgewater. Rebecca, good

to see you. You too, John. What's the lesson from gold's climb to 3,000? So gold is an asset that a lot of people get confused by, but I can break it down very simply. It does best at the tails. One tail is when we have rising high inflation, especially faster than expected, and the other tail is recessionary fear or crisis fear. I think right now you've got a little bit of both. You certainly have uncertainty that growth could slow.

And as we saw in the latest Consumer Sentiment Report, inflation expectations are expectations are rising I think a lot faster than people might have expected so how long does it last well you tell me where Trump is going with tariffs and I'll tell you how long it lasts okay I think you know the bias of risk is that we are gonna see more tariffs come early April I think the administration has been pretty clear that's where it's going. And I would guess, and this is a guess, that President Trump is going to continue to do a bit of a dance with them as negotiations play out. And that is going to keep uncertainty elevated and inflation expectations elevated.

So in my mind, gold probably still has some room on the upside even after reaching today's record level. Oh, we know he's not afraid to dance. Well, give me a read on the risk reward in investing in Europe here, given Germany's moves toward taking on more debt and the tension with President Trump. Europe's decision to relax its fiscal straight jacket,

to spend more on defense and infrastructure, this is really a historic moment. And I don't think it would have come without the United States backing away from Ukraine and moving forward on more tariffs. Longer term, there is going to be government capital supporting these sectors. So I do think there's a long term investment there. In the very short term, though, we have seen 12 month forward price earnings ratios for Europe now above historic averages and we know we're getting tariffs in a few weeks on Europe. So, for a tactical investor, I might be waiting for a better level to get in on some of these sectors,

but taking a longer term structural view, I think having global defense and infrastructure exposure in my portfolio, whether it's Europe or more broad global, I think that's gonna make a lot of sense. The money is gonna keep flowing for a while. Speaking of money, what about the currency impact, including the ruble? Yeah, so I put this in my notes to you earlier today. I was just looking to see how much the dollars moved

year to date, and it jumped out to me anyway that one of the best performing currencies in the world year to date has been the Russian ruble. And I have to assume that's because no one owned it anymore. And now we have the possibility of some easing of sanctions if we have a resolution with the war in Ukraine. It's a question to me how much U S and Western businesses are going to be excited about doing business again in Russia in a serious way.

President Trump is meeting with oil executives next week. I would guess Gazprom and other initiatives may come up in that. But needless to say, it just shows you when things get extremely overbought or oversold, it just takes a little catalyst to get a big reaction. So maybe that's a trade, but it sounds like you'd be careful with that. Oh gosh, yes. I mean, if you think about assets being seized,

businesses being seized, how quickly the spigot was turned off when it came to Russia, I would think there are probably better risk reward, investment ideas out there than going down that particular path- I think today frankly is a time where you're probably not taking that much

risk you're looking to be fairly defensive given the uncertainty out there. So in terms of markets overseas. The UK Switzerland tend to have fairly low beta as they're not as volatile as the U. S. let's say and more defensive indices-

so if you wanted overseas, and more defensive indices. So if you wanted overseas exposure and in the US, I still like tech structurally. I think a lot of the profit taking that we've seen over the last several weeks has brought valuations down into a more attractive area, not cheap, but certainly more fairly valued. And longer term, it's just a matter of when we get to generalize artificial intelligence, AGI. And that's going to be another chat GPT moment, I think. What about India and China?

China, some of that policy uncertainty, maybe not to the same degree that you were talking about with Russia. India was a high flyer last year and has really been struggling this year. Yeah, it's interesting. Both of those are interesting, John. China, you know, earlier this year there was news reporting, not confirmed, that Chinese government entities were helping to support their own market. We've seen that before, so it wouldn't be surprising. And certainly the government is continuing to incrementally add stimulus.

Just yesterday the central bank said they were going to look for new ways to try to support consumers, support the economy, and support the economy in a way that is going to be a significant step forward. And certainly the government is continuing to incrementally add stimulus. Just yesterday the central bank said they were going to look for new ways to try to support consumers, support the economy. So they are trying to find ways to support growth. I think we're not going to have an aha moment like we saw in Germany in the last few days, but they're trying to move in the right direction and again, very under owned, very cheap.

At the same time, I think it's more likely than not that we get more tariffs against China. We know that the US and China both talk about capital restrictions as a possibility. So I would tread a little carefully there. I think there are ways you can play a China recovery without owning Chinese stocks. Some of the markets that are heavily sensitive to Chinese growth conditions can give you similar exposures without the political risk. In the case of India, I'm more of a believer in investing in India in the longer term through private asset vehicles to avoid some of the short-term volatility in the currency and the markets that we've seen again last year to the upside and then more recently a lot of profit taking.

All right. You've put a lot of pins in the map for us Rebecca Patterson thank you. Thank you. Well the NASDAQ 100 rebounding today but it's still down about 6% this month and DA Davidson says one mega cap tech name is due for a bigger bounce we'll get that pick next and Nvidia was a standout winner this week in tech we're gonna look ahead to the next major catalyst for the company, its big AI developer conference, and what's at stake for investors when overtime returns. ["The Big Game"]

["The Big Game"] Welcome back to overtime. Mag-7 stocks bouncing back today after another rough week for tech and the Mag-7 index still down 12% for the year. DA Davidson upgrading one name to a buy though, Microsoft. DA Davidson's Gil Loria joins me now. Gil, why'd you upgrade Microsoft?

Well, two reasons. One is that there's a really big sea shift in the market between consumer as a driver and enterprise technology as a driver. And since Microsoft has the better exposure to enterprise technology, it's now our favorite Mag-6. For the last couple of years, the consumer has been very strong

and enterprise technology spending has been under pressure. Now that the consumer is the weaker part of the market, that means we want more exposure to the leading company in enterprise technology and that's Microsoft. So that's the first reason. The second reason is that Microsoft has gotten a lot more disciplined around CapEx. That's been the main concern for the last six months and now Microsoft is a guided for less capex growth and then be Satya Nadella went out there and said he's going to start leasing out more of the capacity and then see we found out this week what he's

exactly what he's doing which is he's putting his overflow capacity on core weave and on Oracle and so that way he doesn't have to take on that CapEx while Microsoft continues to get all the revenue from inferencing from OpenAI, they don't have to build data centers for OpenAI to increasingly train bigger and bigger data centers. So Microsoft is much more disciplined on CapEx, and since the stock has been the worst performer among the MagSix the last six months it's actually trading at much more reasonable multiples right now.

So but here I wonder if investors should take pause given Apple's well publicized struggles getting Apple intelligence its AI version out the door. Promise this year bump to next year. If Apple can't figure this piece out, and there's a whole big app ecosystem that would follow on and build on top of AI if they were to roll it out, should investors think differently about how quickly some of these software companies,

some of these app companies are gonna be able to take advantage of these hardware and platform advantages that AI is promising? Well, that's exactly right. If anybody's expecting these applications to emerge right away and drive a lot of activity, they will be disappointed. In Apple's case, that's okay.

We're still gonna buy iPhones. That upgrade cycle, it's not gonna go away. It's just getting pushed out. And in Microsoft's case, their customers will continue to try to build solutions, will continue to try to experiment, to trial, to roll out different products. And as long as they're trying and they're working towards that, they need to use Microsoft Azure and the AI tools there. So Microsoft will continue to get those volumes regardless of when we start getting applications that work.

So then how much of a potential tech industry catalyst or I don't know what you want to call it, it might not be a catalyst, will Nvidia's GTC be? Because they're not just talking about their own product, they're showcasing the possibilities involved with building on top of their technology. That's right. So next week, GTC is the big event of AI for the year. Let's not forget, Nvidia not only facilitates most of the progress in AI through their products,

but is also really trying hard to cultivate the entire ecosystem around AI. They're going to promote LLM model companies, they're going to promote robotics companies, they're even going to promote quantum companies at a quantum day next week. And so they're trying to create, to plant the seeds for these companies to leverage the Nvidia product set to deliver more growth. So we're gonna hear a lot more about that and we'll hear more about Nvidia's new products. Blackwell Ultra, Rubin that'll come out next year and Nvidia has a great opportunity to get the ecosystem excited about what can get built,

even if it will take time. All right, Gil Luria, thank you. We got some breaking IPO news and I believe this was referred to some days ago. Pippa Stevens has the details, Pippa. That's right, John. Well, Klarna filing just now to go public on the New York Stock Exchange under the ticker KLAR.

This, of course, is the Swedish fintech firm. The underwriters are Goldman, JP Morgan, Morgan Stanley, among others, and they are targeting a more than $15 billion valuation that is according to Bloomberg. So once again, FinTech firm Klarna filing to go public. John? All right, Pippa, thank you.

Well, elsewhere in tech, data streaming software maker Confluent turning in a strong week on a down one for the sector. After an investor day last week saw the company tout a total addressable market now over $100 billion in the AI era. I spoke with CEO Jay Kreps today about how AI agents open new opportunities. This is kind of the underlying paradigm shift, right? You know, traditional data databases has really been organized around storage. Like how do I store the data?

How do I look it up at the right time? That's very much built on a human centric paradigm, which is, hey, an application needs to store a bunch of data. When you pull up the screen on your iPhone or on a web page, it has to look up the right stuff and show it to you. And that was kind of the data problem. It's ultimately built around kind of interactive use by people. And that remains important. But you know, in the use of an organization at large, there's now just a lot of software systems that are kind of in the back end talking to each other. That means connecting the systems they have so that they key off of each other.

And that, as you're saying, that's software talking to software. And it goes from being something which is, hey, store the data and wait for John to show up and pull up the screen to now these systems continuously working as something happens in the business, right? The software doesn't go on coffee breaks or go home at the end of the day. It's kind of always doing its job. And that kind of continuous processing, that's the data streaming world. That's what Confluent is focused around.

Plenty of action on the data side in AI. Well, now it's time for a CNBC News update with Leslie Picker. Leslie. Hey, John, Vice President Vance this afternoon expressing confidence that there will be a deal to sell TikTok and keep the app running in the U.S. by the April 5th deadline.

Vance tells NBC News there will, quote, almost certainly be a high-level agreement that satisfies national security concerns. However, he didn't offer any specific examples on the potential buyers offered or involved. A Baltimore judge officially re-sentenced Adnan Syed today to time served in five years probation in the 1999 murder case of Hayman Lee. The circuit judge authorized Syed to travel freely between Maryland, Washington, and Virginia. Syed remains convicted of first-degree

murder and other offenses in the case that was made famous by the True Crime podcast serial and has maintained his innocence. And NASA will have an extra week to submit its mass layoff plan to the Office of Personnel Management. The space agency said today it was given the extension because of the high number of high priority missions it has scheduled this month. Federal agencies faced a deadline this week to submit plans to reduce their workforce and reorganizations. I'll send it back over to you all.

Leslie, thanks. Well, we've got breaking news on the Senate vote to avert a shutdown. Let's get to Emily Wilkins in Washington. Emily? Hey, guys. Well, yes, we do have an agreement now from Democrats and Republicans to start moving on bills.

And if everything goes the way they hope to, within the next hour, maybe next two hours, the Senate should be able next two hours, the Senate should be able to not just advance the bill to keep the government funded through the end of September, but actually pass it completely averting a government shutdown. This of course came after Senate Minority Leader Chuck Schumer came out and said that he would be voting with Republicans on the bill. We expect that of course course, to unlock the other seven votes that are needed to move forward on that.

A lot of contention over this, a lot of hand-wringing really on both sides. Democrats, of course, really wanted to use this as a moment to push back against Donald Trump and really be seen as fighting Republicans. There was a lot of frustration that Schumer came out and decided to vote with them. And then, of course, on the Republican side,

it was more behind the scenes, but there were a lot of Republicans who had a lot of anxiety about voting to continue funding that was technically set in the Biden administration. And Trump has promised that they will eventually get to vote on spending cuts, but at this point, it's not clear exactly when that vote is going to come, how much it's going to be cut

or what that's going to look like. So certainly a huge vote today, but just part of the story in what Republicans in the Trump administration will be doing with their government trifecta. Guys? Well, the market seemed to take some relief that they're holding their noses

and appearing to keep the government running. We'll see how it turns out. Emily, thanks. Well, coming up, when a cool customer isn't a good thing, we will look at how consumer-facing stocks are fairing after another weak data point on sentiment. And we will talk to the US Chief Investment Officer at Mercer, which has more than half a trillion dollars

under management about what she's advising clients to do in this market. Overtime will be right back. ["The Daily Show"] Welcome back to Overtime will be right back. ["The Daily Show"] Welcome back to Overtime, the latest consumer sentiment reading coming in lower than expected as worries over inflation intensify

and the consumer discretionary sector just posted its worst week since 2023. Mike Santoli's back to look at the cooling consumer, Mike. Yeah, John, and just to what degree the overall market has accounted for it and maybe can start to look past it. We'll see. This is the ratio of the consumer discretionary sector to consumer staples on an equal weighted basis.

So it sort of kind of gets away from the over-representation of Tesla and Amazon in the consumer discretionary sector. And you see it's back to this kind of plateau level, this moment of truth. So many charts I look at right now have essentially round tripped back to mid 2024 levels. So you would still say that the market is suggesting that the consumer is an okay shape.

It's not gone full defensive. That's what would look like actually is staples in a consistent way outperforming consumer discretionary. But it probably has to show some signs of life to preserve that conclusion. Now, Bank of America analysts were looking at how retail stocks and other consumer stocks deal with a recession scare, a growth scare,

presuming that's what we're in, or perhaps are going to enter. Let's see shaded areas here. This is the off-price retailers, right? TJX, Ross stores, been favorites of investors for a long time. And you see that they've held their value better in these growth scares.

The question I would have is look at the valuation premium they now have on a price to cashflow basis versus other apparel stocks, which suggests maybe that the market's already figured that out. It's hard to know if those would withstand any perceived downturn in the consumer, any better than the rest of the sector from here. Now finally, Synchrony Financial, a consumer card company, this is private label

credit cards, you see this massive jump. This was right after the election when basically the credit card fee limits and all the other regulatory measures that were thought to be constraining companies like this went away. And then you had a macro shock and basically people said, oh no, we might have delinquencies go up. So again, another round trip, another kind of moment of truth type level for the consumer. So we're still going to be in suspense for a little while. John, next week, retail sales data might help fill in the blanks.

Also explains why people are buying gold like Santoli. Yeah. Well, up next Mercer's US chief Investment Officer on whether today's bounce back is the start of a wider rebound and where she sees the biggest opportunities. And later, the CEO of Y Combinator on how AI is making his latest class of startups the most profitable ever. And check out Rubrik, climbing 25% today after earnings we brought you yesterday here on Overtime.

Rubrik's CEO Bipple Sinha telling us subscription revenue jumped 39% in the quarter. Overtime, we'll be right back. ["The Daily Show"] Welcome back to Overtime. It was a wild week on Wall Street. Despite today's bounce, the S&P 500 logged a four week losing streak, something that hasn't happened

since August. So is it time to start putting money to work at these lower levels? Well, joining me now here on set is Ola Luaganga, U.S. Chief Investment Officer at Mercer. Happy Friday. Happy Friday, John. So back in January, I think when you were here, you said you were shifting away from U.S. equities, which looks prescient now. Are we down enough that you'll shift back in? Not just yet.

I mean, even with the pullback, where we are is about, call it 24-ish time P.E. Average P.E. the last five years, 23, so we're like, we're pretty fair. You have to go back pretty far to see, you know, call it 19. That's a pretty decent pullback. We're not there yet. You want 19? I mean, no, no, 19. That's a pretty decent pullback. We're not there yet. You want 19?

I mean, no, no, no. Like, valuations are still high. Valuations are still high. We've seen a pullback, we've seen a rebound, but valuations are still high. So, with that and the backdrop that we have, we're cautious equities overall, because tariffs impact companies,

and that's forward earnings, so it's very uncertain. You liked emerging markets. Under under these tariffs do you still? We are neutral equities overall so more index type products to be able to get exposure but the tariffs affect you know all of the regions emerging markets in particular we're seeing the tariffs particularly with China which makes up a big contingent of emerging markets so right now we're fairly neutral but cautious overall with equities. Private credit isn't looking so hot either. So what do you do with that?

Private credit isn't looking so hot maybe in the front end direct lending, right? Like the safer aspects of the market, if you were to start looking at asset-back financing, you're looking at opportunistic credit, where the debt covenants are there, the yield is still floating rate, lots of opportunities there.

But even basic fixed income looks pretty good. So the curve looks like a check mark right now. Front end, fed funds, first few months, front end is about 4.3, 4.5, just about. That's what you get on the tenure. So it looks pretty attractive. It sounds like you're saying safety and patience. You seem very chill.

We, if you woke up last week, So it looks pretty attractive. It sounds like you're saying safety and patience. You seem very chill. We, if you woke up last week, it kind of looks like, don't do Monday, right? Like skip those few days. You get back to where things were. So we are in a safety mode. We're a little bit more defensive. We're optimistic.

We'll see what the Fed does next week. But fixed income is where we're earning a lot of yield and we just got to stay nimble and keep dry powder on tap. What about gold? Gold has never really been within our strategic asset allocation. It's a ties now, but it tends to be a flight to safety, which is what we're seeing. But it's not one of those strategic asset allocations that we do, given the volatility of the asset class. You are also wary of Bitcoin, even after the election. Bitcoin has come off the boil a bit, quite a bit since then.

I was trying to perk up at the end of the week. Do we learn anything about it as a store of value or whether it has a strategic place in portfolios for you? It just doesn't have enough data. It doesn't have enough data. It doesn't have enough data. Now we are seeing some of the central banks, maybe the US perhaps talk about it as a store of value, maybe using it and sovereign wealth funds,

those types of things. We have to watch and see that first, but it doesn't have enough data for you to be able to predict any kind of forward value. It breaks down when you start looking at the correlation across multiple asset classes. So it needs a little bit more staying power or policy action to be able to have either central banks hold it or those types of things. We're just not there yet.

Do you expect that tariffs could freeze the Fed from cutting? The Fed tells us exactly what they're going to do. We have five days or so to wait and see what happens, but they have been very steady in being cautious and data dependent. The data so far has been good, but like we really haven't even seen the impact of some of the layoffs that we've seen from federal, from some of the federal workers,

that needs to come in play. So rates have come off, inflation has come off, we have to see unemployment, which we suspect will pick up given some of the layoffs that we've seen. rates have come off, inflation has come off, we have to see unemployment, which we suspect we'll pick up given some of the layoffs that we've seen. Okay. Indeed we will see.

Alaluaganga, thank you. Thank you so much, Ron. Immerser. Well up next, the CEO of one company that's using AI to help humans work more like computers. And Apple stock, having its worst week since 2022, after announcing its core AI features will be delayed. That's the topic of

the latest installment of my on the other hand newsletter. This week's debate, does Apple's core AI delay signal big problems inside the company? You can scan that QR code on your screen now to join the conversation. Over time, we'll be right back. There's a lot of talk about AI reaching a point where it can work like the human brain, but what if AI could help the human brain work more like a computer? Well today let's take time out with a CEO who used his disabilities paired with software to unlock new abilities. Cliff Weitzman is the founder and CEO of Speechify, a top 30 productivity app in the iOS app store that has more than 20 million users. Speechify is a text-to-speech app that'll take any website or any text you photograph and

essentially turn it into an audiobook it reads aloud to you. Cliff moved to the US from Israel when he was 13, dyslexic and struggling in school. So English is my second language and I have ADHD. And when I was a kid, it was really challenging for me to learn how to read. And eventually my dad started reading books to me and recording them like a cassette tape and I would fall asleep every night listening to an audio book that my dad made for me.

And it made me fall in love with stories, even though I didn't love books that much. And as I went through high school, I was in special education class every single day. And I really struggled with the reading portion, but I always believed that I could be the person that I wanted to become, and the key to unlocking that was reading.

So this is where the new abilities come in, aided by the technology in Speechify. You've heard of speed reading? Well, it turns out you can also train yourself to speed listen. And after Speechify turns text to audio, it can play that audio back at high speeds. So now Cliff, because of his dyslexia and ADHD, says he consumes information about as fast

as Joey Chestnut consumes hot dogs. No one's even close to being able to listen as fast as people with ADHD, with the exception of people who are fully blind. So what happens with ADHD is your brain is really good at dealing with massive amounts of stimuli all at the same time. In fact, it calms you down. So when I was taking philosophy classes in college and we would get assigned

you know Nick and Mickey Ethics by Aristotle, which is a very interesting piece of content but a little dry, the way I got through it is I put the text on my computer, I cranked speechify up to 4x speed, I listened to classical music at 30% volume on my computer at the same time, and I was just locked in. The timeout takeaway, AI hacks people. We're used to thinking of cyborgs as people who are part robot and part human physically, but Cliff's story with speech-o-files

made me consider that maybe it's not just a matter of AI assisting us in tasks or taking away grunt work. AI might just help us gain abilities that weren't humanly possible before. Well up next, the CEO of Y Combinator, which backed Airbnb, DoorDash, and many others on how AI is helping startups grow faster than ever before. And don't forget, you can catch us on the go

by following the Closing Bell Overtime podcast on your favorite podcast app. We'll be right back. Welcome back to overtime. Why Combinator helped accelerate startups such as Airbnb, DoorDash and Coinbase, but its latest group of companies might be its most profitable yet. Thanks in part to AI. Kate Rooney has the details, Kate. Hey, John, yeah, so Y Combinator wrote the first checks for companies like Dropbox, you think of Airbnb, and Stripe, YC as it's also known,

says it's now funded around 5,300 startups worth an estimated $800 billion in market value. So over a dozen of those are now public. More than 100 have topped a $1 billion valuation at this point. You can think of this as Silicon Valley's boot camp. So they back founders right when they're hatching an idea. They write a $500,000 check as well. And then there is some hands-on coaching that goes on.

Gary Tan launched his own company out of YC back in 2008. He is now the CEO of Y Combinator. At their demo day in San Francisco this week, Tan told me the mindset of grow at all costs, remember that, it has shifted completely. This class of companies are seen, he says they're growing faster than any that he has seen in the firm's two-decade history with real revenue. A whole YC batch in aggregate, on average, grow 10% per week.

So not just like the number one or number two company out of a cohort of you know 30 or 50 or 100 literally the whole batch in aggregate is growing revenue by 10% week on week and that's never happened before. And that is thanks to AI and something Tan calls vibe coding for a quarter of the startup batch he says 95% of their code was written by large language models. John, back to you. Kate, it's interesting. Yeah, part of it is that vibe coding so they don't have to hire as many people, but then

part of it is also the hyperscalers who are buying the GPUs, the accelerators, the NVIDIA chips for them and allowing them to operate on a consumption basis. Back in my day, when I was first starting to grow up in Silicon Valley, startups had to buy their own Sun servers and whatnot and it was really expensive. There go your profits. That's right, well the rise of cloud,

the access to chips, and how much cheaper this technology has gotten. That's something we're hearing, but one interesting thing from this week is that they were saying even in the last couple of weeks, the efficiency They've gotten through coding has just completely changed I talked to one founder who said the technology now as it exists six months ago

He would not have been able to build his company So the pace at which this is all going is just mind-blowing And it's quite likely that that pace is gonna pick up if Jensen Huang has anything to say about it in the week ahead. We've got GTC, NVIDIA's big event where they're expected to roll out new technology capabilities that perhaps will let some of those Y Combinator startups build new technology at a better price performance ratio. I'll be watching.

Kate Rooney, thank you. Thanks, John. And that is going to do it for us here at Overtime for the week. Fast Money starts right now.