Closing Bell - CEA Chairman On Trade; Lizz Ann Sonders On Market Volatility 04/29/25

Episode Date: April 29, 2025

A loaded earnings day meets fresh tariff commentary and broader macro uncertainty. Paul Hickey of Bespoke helps break down the market action. Key earnings include Visa, Starbucks, Booking Holdings, Caesars, Seagate, First Solar, and Snap. Stephen Miran, Chairman of the Council of Economic Advisers, weighs in on the evolving trade backdrop and the latest deal talks. Guggenheim’s Gregory Francfort breaks down Starbucks, and Stifel’s Mark Kelley offers insight into Snap's results and ad spend trends.Charles Schwab’s Liz Ann Sonders joins to lay out the macro setup and the setup during the busiest week of earnings. Plus, Super Micro slides on weak preliminary results. 

That's the end of regulation. Blend Labs ringing the closing bell at the New York Stock Exchange. Leonardo DRS doing the honors at the NASDAQ. Stocks gaining steam throughout this session with the Dow and S&P 500 closing higher for the sixth day in a row as investors key in on hopeful comments around trade and as volatility retreats. That is the scorecard on Wall Street, but the action is just getting started. Welcome to Closing Bell Overtime. I'm Morgan Brennan along with John Ford Well, guess what? We got a big show coming your way today including earnings results in just moments from Starbucks Visa booking holdings snap Seagate and more Plus Council of Economic Advisors chair Stephen Myron will join us exclusively to talk about the latest on tariffs and trade

The economy markets as President Trump marks 100 days in office. And Charles Schwab's Lizanne Saunders will weigh in on whether the market has more upside ahead or if a retest of the lows could be in the cards. Well, let's get straight to today's market action. Joining us now is Bespoke Investment Group co-founder Paul Hickey. Paul, it's great to have you on. A lot of green on the screen again. We just mentioned six straight days of gains for the S&P and the Dow.

Nasdaq's actually higher for the S&P and the Dow. NASDAQ's actually higher for the month of April. Brings me back to a note you published at Bespoke yesterday, which is really the fact that stocks have been, and the S&P in particular are less than 1% from the flat line now for April, a comeback kid. Oh, yeah. I mean, like, we're down 1% in the S&P 500. Like you said, the NASDAQ is up.

The S&P 500, there's only been about six other months where it's declined 10% inter-month and rallied 10% inter-month off that low. It's never finished the month positive. But when you look a year later, we were positive all the time. But what's interesting is we're stuck in this, sort of this, you know, between the trenches

of where the economic data and fundamentals have been and where we're going. Everything has been good in the past and we're expecting terrible things in the future. These earnings reports that we're seeing on a day-to-day basis sort of reminds me of back during COVID when we get the updates from Cuomo talking about case counts. And if we had a low number of increases in COVID case counts, the market would rally. And if we had a high number, the market would sell off. And so with each day that we're seeing

positive earnings reports, and the guidance isn't necessarily as bad as people were expecting, the market is just drifting higher each day. And so we're gonna get the big reports coming up this week and we'll see how that plays out, whether they can keep this momentum going. Okay, constructive trade headlines aren't hurting either.

Speaking of earnings, we have our first earnings report to bring you. Caesar's results are out and Contessa Brewer has those numbers for us. Hi, Contessa. Morgan, Caesar's first quarter revenues in line with expectations at $2.8 billion for the quarter, though its loss per share was greater than consensus, a loss of $0.54 versus

$0.19. The key earnings metric here is EBITDA. The company reports that it grew 4% over last year, and that's notable because of that tough comp with Super Bowl in Las Vegas last year. Caesar's met EBITDA expectations in Las Vega and beat them in its regional casinos, which remember there was some bad weather in New Orleans. There was a terror attack in January,

but of course they also had the Super Bowl in February. But regionals outperformed the strip. That's a big deal. The big story here also, the growth of digital, it made significant gains. Analysts will want more details about that on the call. And of course the outlook for the current quarter, given the dismal consumer confidence data that we got today.

You can see the stock right now up 2.5%, Morgan. Okay, Contessa, thank you. We've got booking holdings results out too. We're going through those numbers. We'll bring them to you here in just a moment. I want to bring Mike Santoli into the conversation as well. Mike, your thoughts on what we're seeing with this market rebound right now, does it have legs?

I mean, it's got legs at least for maybe a bit more. I think that would be the tactical conclusion you would say. I mean, we're still burning off a lot of the kind of excess overshoot to the downside that we got. You do have it still enough, think kind of skeptical investor positioning and I think we should also keep in mind we've now rallied up to a level that this market first reached almost ten months ago so you're kind of just sort of you know testing out the ground that you've been covering for a long time here. So

for now I think it works again I think we're getting to the point I don't know where that level is where it's going to require something tangible something that's pretty decisive in terms of the de-escalation on the trade front and you know combined with the economy hanging in there so you know seeing no real moment of oh no coming from let's say the jobs data or something else that starts to resemble the the survey data that we've been so worried about. Paul, we've also got Visa earnings coming up any moment now. That stock is up 8% year to date, about 25% year over year, I believe.

And it's not certainly just a US read. They've got a lot of investment in consumer growth overseas. How much of an overall signal of consumer health do we get there? Yeah, I think to your point, John, with Visa and booking, both of them have more international exposure so that they're a read on also strength, how things are going in Europe. And when you look at that, the European markets have been on fire this year. So that could be a positive surprise for those names. You have the airlines, the U.S. airlines, you know, lowering expectations. Hey, Paul, got to interrupt you because Starbucks earnings are out. That stock is heading lower

by just over 2 percent. So is booking holdings. Let's get those numbers from Contessa Brewer right now. Contessa. John, we're looking at earnings per share and revenues that are beating expectations here. We've got earnings per share 24.81 coming in adjusted versus the street estimate of $17.33 and then revenues, this top line beat of 4.76 billion. The street was expecting 4.59 billion. The other thing is we're seeing beatings across a bunch of different metrics here. Gross bookings come in higher than expected at 46.7 billion.

EBITDA comes in at 1.1 billion. The street was expecting 850 million. And then room nights also beat here. The real question on the call I expect is going to be about how this is breaking down. Are they seeing a jump in travel, say in Asia, where they have so much exposure versus the United States? But clearly a big beat here and that stock is actually down 4.3% right now. Morgan? Well, I wonder why that is. Mike Santoli, the travel names have been suffering lately, but overall so far that seems like good news from booking, though I guess we still have a lot to hear about the guide.

Yeah, I'm sure that's probably what it is. I haven't looked at it exactly, but that has been the rule. In general, the market's not really punishing companies that basically pull guidance or say we're not really sure about the outlook because the market already figured out that it was an opaque outlook from here. So not sure exactly on the booking front, but we do know that, you know,

the first quarter didn't really pick up the majority of what people were complaining about in terms of declining expected travel volume. So we'll see. Paul, I wanna get your reaction to booking and Caesars. complaining about in terms of declining expected travel volume. So we'll see. Paul, I want to get your reaction to booking and Caesars, because you're talking about two consumer facing companies that are focused on services.

They're focusing, actually, hold on a second. We have Starbucks results ready. Kate Rooney has those for us. Hi, Kate. Hi, Morgan. So it was a miss on earnings and revenue in the quarter for Starbucks, as well as same store sales. Adjusted EPS coming in at 41 cents. That missed street expectations by 8 cents. That was on revenue of $8.76 billion.

Also light on the revenue number. Same store sales as I mentioned. Did miss expectations down 1%. The consensus there was for a 0.6% drop. Starbucks does say that was partially offset by 1% increase in the average ticket size, which analysts are also watching. International comp store sales increased 2%. China sales were flat. Starbucks says in the release here that China comprised 61% of the company's global portfolio, at least at the end of the quarter. Operating margins did contract 6.9%. They're driven by deleveraging. They also talk about added support and labor support for this Back to Starbucks campaign,

plus some of the restructuring costs. Company opened 213 new stores, they say, in Q2. CEO Brian Nicol saying in the earnings release, the quote here is, my initial optimism has turned to clear confidence. We are where we should we should be says at this point in the turnaround our financial results don't yet reflect our progress but we have real momentum he says with their back to Starbucks plan they are also testing learning at speed seeing some of the changes in those coffee houses shares you can see lower here after hours down about 8% for the year, guys. Back to you. All right, Kate, thank you.

Meantime, Visa up about a percent with its results out. Hugh Sun has the numbers, Hugh. Hey, John, so it looks like a beat for Visa on the bottom line with adjusted EPS of $2.76 a share versus the $2.68 estimate. Now revenue at 9.59 billion is just above the 9.55 billion dollar estimate. Total payments volumes in the quarter grew 8 percent while cross-border volumes grew 13 percent, both of which I will point out is lower

than the previous quarter. Consumer spending however was quote resilient despite the economic uncertainty according to Visa and I will point out also that the board has authorized a new 30 billion dollar share repurchase program. Back to you guys. Okay, Husson, thank you. Shares of Visa are up about 1 1⁄2% right now. Paul, I'm gonna go back to you, because I was gonna start this question focused on experiences, whether it was Caesars or booking holdings, but now we've got Visa talking about

resilient consumer spending with cross-border volumes up another 8%. We know cross-border volumes in general for these companies. Visa's and MasterCard's of the world has been strong for many quarters now. And then Starbucks. Starbucks missing on some key metrics but still saying ticket sizes grew. What does all that tell us about the consumer? You know, I think the consumer is holding in better than most people are giving the consumer credit for. You have, you know, just overall higher levels of inflation push those levels

up. Starbucks, I think the numbers weren't great at the headline level, but they've been talking about being a second half story as far as the recovery is concerned. So we'd like to hear more about how they feel on that respect. And I think the turnaround plan there is still on track based on what I've heard so far in the commentary. Visa, I think, is a name that would be the stock isn't cheap, but again, they have international exposure there and consumer spending, retail sales have been holding up very well. So the measures of the consumer as far as what the consumer is doing, not what the consumer is saying have been a lot better.

Okay. We've got Snap earnings out as well. Julia Borson has those numbers. Hi, Julia. Hey, Morgan. Snap revenues roughly in line with expectations, 1.36 billion versus the 1.35 billion estimated. Profits as measured by adjusted EBITDA is a strong beat and more than doubled from a year ago, 108 million versus the 64 million street

account estimate. Daily active users are a million ahead of expectations 460 million and the company announcing 900 million monthly active users that's up from the 850 million it announced last August. Now snap is not giving any guidance citing uncertainty about macroeconomic conditions saying quote while our top line revenue has continued to grow, we have experienced headwinds to start the current quarter. But the company noting its progress in various areas, having grown total advertisers 60% year over year, while direct response advertising grew to 75% of total revenue. John?

All right, Julia, thanks. For Solars, Tenkin here here in overtime down about 10% See if we could find out why from Pippa Stevens Pippa. Hey John. It was a mixed quarter here EPS at 195 That was a pretty sizable miss with Wall Street looking for 250 revenue though did beat a little bit at 845 million that was ahead of the 839 that Wall Street was looking for. But the company did lower its guidance essentially across the board here for the full year. They now see EPS between $12.50 and $17.50. That's against the $18.14 that Wall Street was looking for. The company did note the near-term challenges presented by the new tariff regime.

Certainly we'll hear more about that on the call. And shares now down more than 10%. John? Pippa, thanks. Meantime Seagate is higher by about 6.5%. Christina Parts-Nevelis has those numbers. Christina? That's because we're getting a bullish outlook from data storage maker.

Like you said, Seagate, the company beating on earnings per share of $1.90 with revenues of $2.16 billion, higher than the street anticipated. Gross margins for the quarter also coming in higher. But for the outlook, Q4, they are guiding EPS at a midpoint of 2.4 or $2.40 That's 33 cents higher than what the street wanted with Q4 revenue at a midpoint of 2.4 billion also higher The press release says specifically about guidance. It reflects quote minimal expected impact from global tariff policies again Minimal expected impact from global tariff policies and Again, minimal expected impact from global tariff policies. And that's why your sink shares up at 6.5%, Morgan.

OK. Christina Parsenavilles, thank you. Paul Hickey, thank you. And Mike, we'll see you in just a little bit. President Trump marking 100 days in office this week. And it's been a volatile stretch for the market, with big swings on tariff and trade headlines. President Trump updating reporters just last hour on Talks with India. and it's been a volatile stretch for the market with big swings on tariff and trade headlines.

President Trump updating reporters just last hour on talks with India. India's coming along great. I think we'll have a deal with India. The prime minister, as you know, was here three weeks ago and they want to make a deal. We'll see what happens. Well, also today, Commerce Secretary Howard Letnick telling our Brian Sullivan there is a deal done with one country, but that he is waiting on the country's prime minister in Parliament to give approval. This comes as the conference

board's consumer expectations index fell to its lowest reading since 2011 with tariffs weighing on sentiment. But joining us now in an exclusive interview from the White House is Stephen Myron, Council of Economic Advisors chair Chair Myron it's great to have you on the show, welcome. Thanks so much for having me, it's good to see you. So let's start right there with trade. When can we potentially expect to start hearing about some of these trade deals that are being negotiated and being struck right now?

And how much hinges on, I guess, a similarity between these deals in different countries? Yeah, so I hope soon. You know, I will say that the negotiations have been moving really well. We've got lots of countries that want to come and deal with the United States. The United States is the biggest and deepest consumer market in the world, and everyone wants access to it. And so that's why we've had over 130 countries come and say, hey, we want to talk to you, we want to negotiate.

And, you know, a large number of written offers as well. And those are all proceeding. And hopefully, we'll start hearing about deals that are done in coming days, in coming days to weeks. Yeah. Meantime, auto tariffs whittling back some aspects of those tariffs. Why? Why now?

Well, I think it's important to give the economy breathing space to adapt to the new world. President Trump has taken historic action in terms of speed and scope with which he's acted to put American workers and firms on fairer ground vis-à-vis our trading partners, vis-à-vis the rest of the world. And I think it's important that we do so in a way that allows the economy to transition as we seek to make trade fairer. Steven, what's the impact if China continues to hold back these rare earths magnets that are so important to aerospace

and so many other critical electronics? I mean, the treasury secretary said in recent days that China tariffs at these levels are unsustainable and it certainly is a large economic force in the world. What happens in the US economy if particularly this rare earth impasse continues? Yeah so I don't see those materials being cut off from the economy for an extended period of time. You know and Secretary Bassin is completely right when he says that the current rates are in the current

arrangement is unsustainable Therefore, you know I do expect that we will have that we'll have a move towards a form of de-escalation and I and I expect that it'll come That it'll come sometime in in the near future You know at the end of the day what we want to do is we want to provide breathing space For economies of the world to adjust to the fact that President Trump is putting That is putting American workers and American firms for the first time after decades of neglect.

Well, at the moment, in recent days, the U.S. and China can't seem to agree with whether talks are officially happening or not. So what gives you confidence that this won't last long? So all that back and forth about talks and this and talks and that, that's all politics and that's all headlines. But I think at the end of the day, it's in the interest of the economy in the United States, the economy in China, and the global economy that there be some form of attempt

to give breathing space to move past an impediment like the one you mentioned before with rare earths. We've had a wild month for the markets. It's pretty incredible to see the S&P less than 1% from the flat line here for the month of April. It's been quite the comeback story, but we've seen it across a number of asset classes, this volatility this month.

Commerce Secretary Letnick told our Brian Sullivan earlier that President Trump is not focused on markets. He was very focused on markets in the first administration in his first term. Why not so much now? So it's even better than you said. Not only is the S&P 500 back up to within spitting distance, but the NASDAQ is now up on the month, isn't it? And I think that's a that's an historic testament to to the president's policies.

And I mean, look, you know, the the policy change the president enacted earlier this month was truly historic. And so the fact that there was financial market volatility accompanying that shouldn't be a surprise to anyone. But financial markets are ultimately forward-looking, and this administration, President Trump's policies are focused on making this the best economy in history and creating the best economy in the world. And we're doing that not only through trade policy, but also through further tax relief

for American workers, further tax relief for American workers, further tax relief for American firms, and an aggressive deregulatory agenda to make the United States the best place in the world to do business. We want everyone to think that the United States is obviously the place to expand business, to invest, to create a factory, to create a new facility,

and to hire and create jobs. And the financial markets are starting to look forward to that because we are focused on creating the best economy in history, the healthiest economy in history and capital will ultimately flow to those investment opportunities which are a function of economic growth. I'm old enough to remember when a number of economists lining up with the president seemed to be saying that tariff costs would not be passed through to consumers

yet today there was a bit of a question dust up on whether this proposal internally at Amazon to show how price increases factored in that was controversial it seemed the potential of it with the White House. Can you square that for me? Did you expect higher prices over an extended period of time for consumers as a part of this and is there an issue a problem with consumers being able to see why those prices are higher? Yeah sure so no we

don't see higher consumer prices over an extended period of time at all. Let's be very clear the United States has all the leverage because we're the biggest importer and we have all the options because we can change where we import from. We can import from other countries, we can import from ourselves, we can I mean we can make stuff here at home and we can shift our import patterns from countries that treat us horribly to countries that treat us a lot better and that make trade deals with the United States. That leverage and that flexibility means that other countries will absorb the cost of the tariffs in order to retain access to our markets because access to our market is the truly unique commodity. So in the fullness of time other countries will bear the

burden of these tariffs, however in the short run as you've seen in financial markets, there can be volatility. And that volatility is a result of the historic speed with which President Trump has moved to place American workers first for the first time in decades. Now, that historic speed also creates volatility in financial markets, and it also opens the scope for some volatility in the real economy as well and in prices. But that will be fleeting. In the fullness of time, other countries will bear the burden of the tariffs because we have the leverage because we have the flexibility to change our import patterns Steven you've done a lot of work and a lot of research on the intersection of trade and national security

You've also done a lot on the dollar What do you make of the move we have seen these last several weeks in the dollar and should we be thinking about a national security? aspect to U.S. financial assets, whether it is the dollar, whether it is treasuries, given the fact there are a lot of foreign investors in these asset classes. Sure. So, a couple things there. First of all, for thinking of the dollar, you really should go to the Treasury Department, not me. But that said, I'll say financial market volatility, as I said before, is totally normal.

But over the long run, capital will follow investment opportunities, and investment opportunities are a function of economic growth. And we are focused 100% on creating the best economic growth this country has ever seen, and the investment opportunities will come along with that, and capital will flow there. And so despite the short-term volatility that we're experiencing as a result of the historic change in policy, in the fullness of time, capital will flow

to where the opportunity is and we're creating those opportunities. Now, you've mentioned another point, which is the intersection of finance and national security. And I think it's critical to observe that part of dollar dominance is the fact that it helps underline national security. And I think it's critical to observe that, you know, part of dollar dominance is the fact that it helps underline national security.

Because in order to really keep ourselves safe, we need a financial system that is beyond reproach and that will be able to provide the market depth for financing our national security needs and the national security needs that we need to protect our trade flows and trade flows and trade flows of our trading partners.

So the two are intertwined and always will be. Okay. Chairman of the Council of Economic Advisors, Stephen Myron, thank you. Thank you. Well, we've got much more earnings action on the way, including analysts' reaction to results from Starbucks and Snap. And what to listen for on those conference calls at the top of the hour. And don't miss our interview with Charles Schwab chief investment strategist

Lizanne Saunders with her outlook on the market the Fed and much more overtime is back in two welcome back to overtime let's get another check on Starbucks. Stock moving fractionally lower in overtime after reporting an earnings miss just moments ago. Let's bring in Guggenheim Securities Analyst Gregory Frankfurt. Good to see you. So, you've got a neutral $83 price target.

It's right around there here in overtime. The new CEO is saying the turnaround is about where it should be at this stage, even though it's not reflected in financial results, should we read that to mean soon it will be reflected in financial results? Look, I think Brian Nicol is very well respected, and I think he's going to get a decent pass from the investment community on the top line perspective. I think in the next six months, he's probably going to get a little bit more pressure to lay out a vision for what he thinks unit growth and comp growth and margins could be over the next two or three years.

He's so far pulled guidance, but I think he's got a bit of a leash and it's going to be very interesting to hear what he has to say on this earnings call. And so the stock now is about where it was four and a half years ago. At what metric should we watch the trajectory of to really get a sense of whether there's strong hope in let's say the medium term, not the short. Yeah, I think, look, the comps in the US being down too is disappointing. I mean, the environment's really tough for restaurants.

You're seeing Chipotle putting up in April pretty strongly negative same store sales. We're seeing Chipotle putting up in April pretty strongly a negative same store sales. We're seeing in a lot of our chains that are gonna report here in the next two weeks. But, and Starbucks is not immune. I think that the challenge is that when you look at this earnings, margins came in well below where people were expecting,

where I was expecting. And I think people, I think investors are okay with that in the short term, but there has to be an accelerating same store sales environment. I think you have to see comps go positive in the fourth quarter as you start to lap down six comps from last year, down 10 traffic from last year, people are gonna wanna start seeing

the top line environment the next six to nine months. North America versus China, what's going to matter more, especially when you are talking about the bigger comp picture and what this turnaround looks like under Brian Nicol? I mean, America matters more because it's a dramatically bigger part of the business. It's probably mid 80% of operating profit, maybe even a little bit higher,

given how much China has struggled. But China is most of where the growth is. And I think that the challenge for Starbucks is if you have to sell China, or if you have to slow the growth, this becomes a low single digit, maybe two and a half percent unit growth business. That's where the challenge is,

not necessarily on the core EBIT or earnings per share. Gregory, thanks for joining us. Share Starbucks down fractionally right now. Well, after the break, Lizanne Saunders from Charles Schwab joins us with her read on the market's comeback from the lows and if it's sustainable. Let's get another check here on shares of Snap. Just reported first quarter results, stock down 13.5%, 14%. We're going to talk to an analyst about those numbers, what to listen for on the call. We'll come right back. The Dow and S&P posting their sixth consecutive day of gains and the Nasdaq is now positive

for April. Even after all of this tariff volatility, let's bring in Lizanne Sonder. She's chief investment strategist at Charles Schwab. Lizanne, always great to get your insights. Thank you, John. You post a lot of very interesting charts, and there's been this disconnect between how consumers feel and what the hard data shows. So what's your sense of what will happen first?

Consumers feel better or the data look worse? Yeah, that's a great question because we have the recency bias of what happened at the very end of 2022 into 2023 when you saw actually a very similar collapse in the soft data as we're seeing now, but ultimately was not corroborated by the hard data. And at that time, we didn't anticipate that it would be corroborated by the hard data. And at that time, we didn't anticipate that it would be corroborated by the hard data. Felt that the underlying pillars for the economy were

strong enough. I think this time maybe is a little bit different. I think we're more likely to either see some catchdown by the hard data to the soft data or some convergence maybe between the two.

But in metrics like consumer confidence, which just came out, it was both the present situation and the future expectations piece of it. The fact that we are already seeing cracks having formed in the labor market. I think the backdrop is a little bit more tenuous now than the last time we had that big divergence

between the soft data and the hard data. So we got this immediate market reaction to the initial tariff headlines and then a sigh of relief in a sense that maybe those initial headlines weren't going to stick, but there's still some kind of a real economic fundamental impact to whatever's coming in and that's lagging. So as part of what you're saying that we're, you know, in a couple months, we're gonna start to feel it? Yeah, and by the way, it's not only lagging,

but I think to use a technical term, John, I think the data's gonna continue to be quite funky in the near term. You had a lot of the pull forward, the tariff front running, whether it's in autos or other retail goods, what many builders have been doing, and that flattered some of the recent numbers.

Now you potentially deal with the offset to that. That said, a lot of companies in that front running have built up inventories. So this concern about the point at which shelves are empty, that might get pushed a bit out because of that front running that boosted inventories that could mean. The shelves are are are kept a little bit more

ample in terms of products so there's going to be a continued push and pull. In this data an attempt to really try to find tooth comit. To get a sense of once we get past the next month or two what's the trajectory of the economy?

The rub is that we're not getting much forward color from companies. You would normally get a lot of that sort of flavor of the future from companies, but we have an increasing number of companies akin to what happened in the early part of the pandemic. We saw another handful of very high profile companies just withdraw guidance altogether.

So analysts are not able to provide some of that light in an otherwise still very murky backdrop. The flip side of this, Lizanne, and I realize it again, it speaks to the uncertainty of this current backdrop, but we just had Stephen Myron from the CEA on from the administration. He is the fourth person from the administration, including the president that we've played sound from on CNBC today, who basically said trade deals are imminent, they're coming. If we do see some big, meaningful trade deals struck, how does that change the forecasting altogether?

Well, I suppose it would be what the nature of those deals are. True comprehensive trade deals between two countries based on history, on average, those take about 18 months to put together. And then it's actually close to four years, on average, historically, for the implementation of those. So that's why there's more discussions that maybe we're going to get some sort of, you know, memorandum of understanding, just the frameworks of a deal versus a true comprehensive deal. And then it's what the nature of those are and whether that sends

a message that there's going to be follow-on with other countries with which we're negotiating. So I guess the short answer is, I don't know what those deals are going to look like. But we'll at least start to get

a little bit more color than we had a couple of weeks ago, for sure. Okay, Lizanne Saunders, thank you for joining us. My pleasure, thanks for having me. And he didn't use the word imminent, he used the word near future. But time now for a CNBC News Update with Bertha Coombs. Hi Bertha.

Hi Morgan. Secretary of State Marco Rubio said today, Russia and Ukraine need to provide quote concrete Proposals to end the war now if not Rubio said the US will step back as a Mediator if there is no progress made Defense secretary Pete Hegseth said today that he'll move to end a Pentagon program That is a government-wide effort to expand opportunities for women in diplomatic and national security areas.

Hegseth called it a woke social justice Biden initiative that distracts from the core mission, war fighting. But Homeland Security Secretary Kristi Noem wrote the House version of the bill that established that program. Secretary of State Marco Rubio co-sponsored it in the Senate. And President Trump actually signed it into law in 2017. And the Justice Department announced today Gilead Sciences has agreed to pay $202 million to settle a lawsuit over kickbacks.

The DOJ accused the company of spending nearly $24 million in kickbacks to doctors for speaking events to get them to prescribe several of its HIV drugs. Gillian said it's settled to avoid potential litigation. Back over to you. Bertha Coombs, thank you. Coming up next, a labor market mystery. Mike Santoli returns with a breakdown of what's behind the disconnect between worker expectations and the hard data on jobs. And cloud software company Freshworks just out with results beating on the top and bottom lines reporting earnings of 18 cents a share versus an expected 13 cents revenue of 196

million versus 192 expected. We're going to hear from the company's CEO ahead of his call with the street. In overtime comes right back. We have an earnings alert on Supermicro. Kate Rooney has the details. Kate. Hey, John. So shares of Supermic micro are plunging in after

hours trading the AI server maker is cutting its expectations for revenue and earnings they're at with some preliminary results for the quarter this is for the third quarter you can see shares down more than 14 percent on sales they're now looking at a range of between 4.5 billion to 4.6 that's down from an earlier range of five to six billion dollars. So a significant haircut there. Earnings forecast also lower for this company. The AI server company blaming some delayed customer platform decisions they say. They say some of those sales moved into Q4 and then also talk about higher inventory reserves resulting from older generation products and their expediting cost to enable one-time market, let's see, enable time to

market, excuse me, for new products as well. The company's going to have a conference call at 5 pm Eastern to talk about more of this, but as I mentioned, shares significantly lower after hours, guys. Back to you. All right, Kate Rooney, thanks. Mike Santoli with us as well. This is significant, roughly 20 percent cut to the top line. Non-G gap EPS cut in half here when there have been questions about the continued trajectory of data center spend on AI. Yeah, exactly. So it's going to pick at one of those nagging concerns that the market has had, obviously not the front and center one, but definitely it's been weighing on the broader semi group.

You know, you have the likes of Amazon and others as you suggest, John, coming out and sort of deferring investments or leases and then coming back and saying, look, it doesn't really change our long term plans, but the market is not sure about that. I do think in the initial flush lower, Supermicro did not really gain back that much of its accumulated losses. The company is still a little bit sort of suspect maybe in investors minds based on some of the issues they had in the past but you see it peaked here around 60 just over two months ago when the overall market peaked and it hadn't really won back too much so clearly in the penalty box on some level Nvidia and the initial twitch lower in that share price also seemed to

react to what was happening but it's just down 1.7 percent. yeah I just want to mention Morgan Dell also down four and a half percent seemingly on this yeah and you guys just said Nvidia down about one and a half percent Mike Santoli thank you we're gonna have much more of this wild overtime earnings action still ahead with a snap analyst who's gonna react to you the big sell-off we've seen in that stock. Plus, payments firm Shift 4 surging after beating first quarter earnings estimates and raising full year guidance. We're going to hear from the company's incoming CEO and whether he's seeing any signs of consumer spending slowing down. That's when overtime returns. Well, on a busy day for FinTech earnings, Shift4, a big winner, surging nearly 13% in

the regular trading session after an earnings beat and a boost to full your guidance. Shift4 processes payments for restaurants, hotels, airlines, stadiums, casinos, to name a few industries. I spoke with incoming CEO Taylor Lauber, who told me he's not seeing signs of consumer spending slowing down or even changing due to tariffs, at least not yet. Lauber saying, quote, anytime a company can blame its performance or lack thereof on the economy, you tend to hear that. And so it doesn't surprise me that companies that are struggling to keep pace are saying,

well, the consumer is weak. We simply don't see that. And this isn't a function of our growth. This is just same store sales. So looking at a restaurant that's been with us two plus years and they're doing about the same as they did a year ago, basically saying is not seeing euphoria, but also not seeing that meaningful slowdown, at least that some companies have talked about, John. Important color.

Well, shares of Freshworks popping after an earnings beat. Up next, CEO Dennis Woodside breaks down the quarter with us before he speaks with analysts on the call. Be right back. Welcome back. Freshworks reporting results this hour that beat analysts expectations on the top, bottom and the guide stock is up 10% in overtime. The productivity software makers serve small and medium businesses. CEO Dennis Woodside told me share gains among larger customers fueled out performance. Revenue grew 19% year over year, operating cash flow margin of 30%, which was terrific

for us. And really there are three reasons why we were successful in the quarter and we think that we're going to continue to be successful. First, we're winning more competitive deals against big competitors like ServiceNow, like Atlassian, like Salesforce. And that trend, we saw that in Q1, that continues this quarter. We're landing bigger deals, so our move up market is working. And our SMB business, which is a big part of our business,

that business was stable in the quarter. We didn't really see much disruption from Q4. Meanwhile, backup recovery and resilience software company Commvault reported results this morning up about 1.5%, 2% today. Also a beat also a beaten raise CEO Sanjay Merchandani telling me that the move toward hybrid cloud is benefiting his business similar to what we heard from f5 here yesterday he also said tariffs could end up boosting demand for Commvault software if customers look for ways to avoid buying tariffs storage

hardware and look to software as a service instead. It depends on the workload, but we have a fairly robust offering and it's a very viable alternative. Many customers are doing it anyway today, not necessarily because of tariffs but because of their design. But I think you can stop and look at it and say, this works too, so it could insulate you. We're seeing customers be more definitive

about being multi-cloud, but also having an on-premise capability. And resilience isn't selective. Resilience has to be across the board, especially in a very digitally connected world. You gotta make sure that if a cloud native app goes down for some reason, I'm not saying cyber, if you have an issue,

you have resilience and ability to bring that all back. So Morgan, hybrid helping IBM and others. All right, keep watching that. We've been early to covering that trend. Well, snap shares are sinking as the company says, it won't provide guidance due to macro uncertainty. We're gonna get an analyst first take on that report. That's coming up next.

We just told you data center AI hardware maker Supermicro a big Nvidia customer announcing preliminary results about 20% below its prior guidance on the top line and shares are sinking in overtime about 17 and a half percent bumping down a number of other names, including Dell, HPE, CoreWeave, and Nvidia itself. And of course, this gets right to the heart of what we've been talking about, which is if you start to see some of these big AI spenders hold off or slow down their spending,

the ripple effects to this ecosystem. Well, another big mover, Snap is plunging after reporting earnings. The company's saying it has experienced headwinds to start the current quarter and is not giving guidance due to macro uncertainty. Mark Kelly covers the stock at Stiefel. He has a hold rating on the stock, cut his price target down to $8 per share from $11 ahead of earnings.

Mark, your takeaway on these results, especially as the company has pulled guidance? Yeah, I'm a little surprised that they are not providing guidance. We've heard from all the really large ad agencies so far, and they're all saying that they're not seeing a pullback in advertising just yet. Some of them left the full year guidance unchanged for the year, or maybe lower the low end. I was expecting more conservative guidance from

Snapchat instead of pulling guidance altogether. I will say that when we do talk to ad agencies when we ask hey where's the first place you would cut your clients budget if you needed to Snapchat does fall in that category so maybe they're starting to see a little bit of that already. Mark, Snap had this AR story adjacent to its core product that for a while seemed to provide a halo for the stock, but now Meta has an AI story through Llama adjacent that's providing a halo.

What does Snap have to do to get some AI juice? Yeah, you know, I think the focus really for Snap has shifted more towards direct response advertising. So the kind of ads that are very bottom of the funnel, you know, enticing a consumer to, you know, click on an ad and make a purchase right then and there. And I will say that's probably the right strategy for Snap at this point.

And I think we're seeing evidence that that is benefiting them. So we saw 60% active advertiser growth in Q1, I think particularly SMBs. So I think Snap is actually focusing on the right things and less on some of the AI features and functionality that others are kind of catching up to them on. So in light of that with LamaCon today for Meta,

earnings expected from them tomorrow, plus Amazon with everything we know is going on there and also earnings from them tomorrow, plus Amazon with everything we know is going on there and also earnings from them tomorrow. What are you watching for? The biggest thing for me with, I'll start with Amazon, is really about the profitability. So we, you know, cut our numbers last week

when we previewed the quarter. We're pretty close to the street low in terms of operating income for Q2, so I think a lot of folks are worried about that. The fact that people are worried about that, I guess, is a little bit of a positive because I think most investors are expecting that. Going back to the super micro question, I'm not expecting any changes to CapEx for either Amazon or Meta. We heard Alphabet last week, they kept their CapEx unchanged for the year. We're expecting to hear the same thing.

For Meta, I would say, we're expecting a pretty solid Q1. And I would say if they do offer any guidance, I think it will be pretty conservative, i.e. weak, but I think most people are expecting that. All right, Mark Kelly from Stiefel, thank you. Thank you. Morgan, I think this super micro move here in overtime, the stock down considerably, is a significant headline tomorrow in part because it's not every day that you see Nvidia

moving more than one and a half percent here in overtime for a headline reason. And it's not just Nvidia, it's Dell and others as well, so there are going to be questions about whether this is a super micro specific issue the company has had its problems or if this is indicative of a broader demand issue in AI in the data center Yeah, the stakes just jumped for all of the hyperscalers and AI players that we are going to be hearing from in their earnings results here on overtime Tomorrow and Thursday as well. We also get PCE tomorrow so a key inflation reading that we know the Fed watches closely and GDP that's going to do it for us here at overtime. Fast money starts now.