Closing Bell - Closing Bell: 3/4/25

Episode Date: March 4, 2025

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business.

All right guys thanks so much welcome to Closing Bell I'm Scott Wapner live from Post 9 here at the New York Stock Exchange. This bigger big hour begins with a new trade war what it means for this market which is volatile this afternoon and making as Brian and Kelly were just saying some very interesting moves here as the final stretch begins. We'll show you the scorecard with 60 to go in regulation were weak for much of the day but now stocks are well off their worst levels led by a a turn in tech, which has seen some buying today. NVIDIA getting a nice bounce. Some of the chip names are as well. And some of the other mega caps are green. That's an interesting move, and we'll follow it over this final stretch in just a moment. In fact, we'll ask Schwab's Liz Ann Saunders, the chief investment strategist there, where we are likely heading from here. Lots of stocks we are watching today from retailers to airlines to cruises. They are mostly weaker on continued fears of a consumer slowdown. Target, the latest company to talk about uncertainty and higher prices.

Banks, they're noticeably weaker as well. It's been a tough week thus far for those stocks right in front of you. Bank of America, Wells Fargo, JP Morgan among the losers. Private equity names not turning much better. We'll watch those, too. It does take us to our talk of the tape, the road ahead for this increasingly unsettled market. So let's welcome in Lizanne Saunders and get her perspective as she joins us once again here on Closing Bells. Good to see you.

Good to see you, too, Scott. Thanks for having me. Yeah. So what are you thinking about this market right now? So I think the turnaround today probably had a lot to do with just technical levels being hit on an intraday basis at the lows. You had the Nasdaq in correction territory. You had tech and communication services down in the negative 12 negative 13 percent territory. And I think that that was probably a trigger to kick in some bottom fishing. And then you similarly saw some weakness in the areas that had been doing well, like financials. So I think it was a bit of an intraday trade. I'm not sure this volatility in these rapid fire swings from defense to cyclicals is going to change anytime soon, in large part because of tariffs.

I mean, is your view of the market mostly unchanged from where it was as you started the year? Or has some of the uncertainty that has crept in now, questions about the economy and consumers and now tariffs on top of that, has that altered it at all? Well, what hasn't changed is our view on what will likely continue to be pretty rapid-fire sector rotations. That's something that we put in our 2025 outlook. We have had a firm view that that would be the case, that you would see these pretty significant leadership shifts and that sector leadership would not be as consistent as factor-based leadership. And factors like low volatility have worked this year and stronger balance sheets. So there is still that quality bias. But what has changed is the outlook for the economy,

because coming into the year, most of the economic data was on pretty sure footing, inclusive of the labor market. You started to see a pickup in manufacturing without services really rolling over. That's the story that has changed. We saw it in the ISM manufacturing numbers where although the headline reading didn't drop back into contraction territory, stayed above 50, all of the innards of that report moved in the wrong direction. You saw huge jump in prices paid, weakness in new orders. That feeds into leading indicators. We've seen the consumption data get revised lower. Industrial production was weak. A lot of the housing-related data was weak. We'll have to see what Friday's jobs report brings, but we've seen that uptick in claims more than explained by some of the Doge federal

government worker cuts. So it's the outlook for the economy that has changed, reflected in the data and also in a metric like Atlanta Fed's GDP now, which is a nowcast. It's not a forecast, but that's in negative 2.8 percent territory for the first quarter now. Does that mean that your expectation for S&P returns this year has also changed? Well, we don't forecast returns. We don't do year-end price targets. I think that that's a futile exercise. I know. But you must have in your mind, you know, given what you just said, that maybe the returns I thought we could get this year could be a little more muted if the economy is going to be weaker than I thought it was going to be just six, seven, eight weeks ago. I think I think the economy is weaker than what we thought. And we're seeing that weakness show up in the markets. We're seeing

it under the surface, too. So through at least yesterday's close, you weren't in correction territory for the S&P, for the Nasdaq, not even for the Russell 2000. That was breached intraday to day, but we seem to be on a rally off of that. But under the surface, we're at correction level average member drawdowns within the S&P, bear market level average member drawdowns within the S&P, bear market level average member drawdowns within the Nasdaq and Russell. So that's what we expected and continue to expect is a lot of churn and rotation under the surface, weakness under the surface. So that you got the fuller story by not just looking at index returns. So that hasn't changed. But I think it's going to be a rough path. More days like this, more weeks like this would not be a surprise in light of

all of the policy related uncertainty. Interesting. I mean, we often talk, you certainly do, about factors, right, within the market. And we've been pretty fixated of late on the momentum factor, which seems like it's continuing to unwind. Certain names are getting a bounce. Others are not. What do you think that means for how this market trades from here? Well, I think momentum, first of all, momentum isn't really a fundamental factor. All the momentum factor means if it's working is that stocks that have been working continue to work. You can have momentum in utility stocks or consumer staple stocks. So sometimes when people hear momentum, they automatically think the high beta names, the tech names, comm services names.

But it's just a concept. And we have seen a reversal there, weaker momentum, because the stocks that had been working aren't working, notwithstanding some of the reversals that we saw today. So the more recent momentum has been in staples, has been in health care, has been in more of those defensive areas. But it'll take a while if that performance continues before it shows up in a momentum factor. The factor that has been kind of the standout in this past sort of month, month and a half period of time where we're really experiencing this volatility is the low volatility factor. And that was a factor we kind of added to our focus list coming into the beginning of this year was in addition to quality factors like strength of balance sheet

and interest coverage and positive earnings revisions and strong free cash flow, we added in that low volatility factor to offset some of the broader volatility that we're seeing in the market. And that has been one of the best recent performing factors. Do you think it's prudent to maintain a more defensive posture for investors? You mentioned what's happening with staples and health care. Not lost on anybody that two of the better performing sectors also lean more defensive. Is that the way to sort of ride out this volatility that you think could persist? Not necessarily at the

monolithic sector level because of our view that we'll see continued rotation. So health care is the best performing sector on a year to date basis. Not in a single week has it been the best performing sector. It is spent more time at the bottom of the leaderboard. It's just had these pops in performance that has brought it to the top of the leaderboard. But a tremendous amount of volatility. Tech sector is near the bottom of the ranking on a year-to-date basis. And on a weekly basis, it's spent some time toward the bottom. But unlike healthcare, it's actually had a week or two where it was the best performer. So huge swings, ultimately landing in some ranking from best to

worst among the sectors, but not a lot of consistency there. Where there's more consistency is at the factor level. So I think at least if you want to focus on certain sectors and our outperforms are still on financials and communication services, our one underperform is on consumer discretionary. But we don't think the analysis is up there. We think you need to apply that factor screening at least on top of any sector related work, because those monolithic calls are really tricky. And even trading around the volatility, I think, is really tricky. So you'll stick to your financials belief. I mean, the stocks have obviously not traded well. Very recently, not on a day like today, but but year to date, that's been a very strong sector. That's where the strongest earnings outlook is. It's where

the strongest earnings were for an otherwise good earnings season that we're just coming to the conclusion of for the fourth quarter. The outlook is very good there. But we have a renewed inversion of the yield curve, obviously economic concerns. So we will assess the data and make a judgment. We make our sector calls with about a six-month time horizon. So they're not set in stone in perpetuity. That just happens to be where the outperform ratings are right now. Appreciate catching up with you as always. Lizanne, be well. We'll see you soon.

You too. As Schwab's Lizanne Saunders joining us here on Closing Bell. She said it, financials getting slammed today. One of the worst performers of this day, Leslie Picker following that action for us and joins us now with more Not Pretty. Not Pretty, although well off the lows of the session, Scott, still though the XLF worst performing sector ETF today experiencing

its biggest daily decline in months. Now, this recent reversal comes after banks had been some of the biggest beneficiaries following the election on the prospect of deregulation and what investors perceive to be a pro-growth agenda. And then the trade war injected this dose of uncertainty that spurred volatility in the sector, particularly over the last month or so. Morgan Stanley, B of A, and Goldman experiencing some of the biggest declines during that period. But each of the big six falling by at least 5.5% over the last month. Macro uncertainty, you guys were just talking about it. It can paralyze C-suite decision-making, which affects the level of investment banking activity, as well as demand for loans and financing. And then there's, of course, the trickle-down element for the health of the

consumer and what it means for credit quality on the balance sheets of these banks, Scott. Do your sources, Leslie, think that whatever optimism there was around animal spirits and M&A is still going to be there? It's just going to be pushed further into the year? I think people think it's on pause. The question, Scott, is how long the pause lasts, because we've been waiting for this revival for quite some time. You look at the data for U.S. M&A transactions, the value, as well as U.S. IPOs. Ironically, they're down by the same magnitude for the first two months of the year, and they're down by 48 percent, according to Dealogic. So cut essentially in half from last year. And last year was a pretty low base. It wasn't like the, you know, things were off to the races last year

either for capital markets. So we've been waiting for this rebound. We see little glimmers of it, but recent IPO performance pretty muted in terms of M&A transactions, all of this uncertainty on the macro front. It's going to be really hard for the C-suite to pull the trigger on some large deals with a few exceptions in certain categories that aren't affected and may actually benefit from the trade war. Appreciate it as always, Leslie. Thank you following that money for us is Leslie Picker. Let's just give you a snapshot here of the market real quick again, because we have come way off the lows. NASDAQ, for that matter, is at the highs of the session. It is up better than one percent. You've had some buying in NVIDIA and some of the other mega cap

stocks. You need to watch that. There's the Russell 2000 today as well. So very interesting moves. We are, of course, watching some of the other sectors, including health care. Angelica Peebles is looking at pharma stocks for us today. And what do you see there? Yeah, Scott, you talk about a rebound. Just look at the XBI. This morning, it was down and now it's up almost a percent and it's recovering today, but it's been down about 15 percent since the election. And that's against the S&P, which is flat. And so it has not been a good few months for biotech. And this is a sector, remember, that's trying to rebound since those pandemic highs. And these are companies that shouldn't get swept up in tariffs since many biotechs don't actually have approved drugs to sell yet. But on the large

pharma side, it's a little bit more of a mixed bag. You have Johnson & Johnson, Lilly, Pfizer, some of the names that are in the red. And then you have some names that are bucking that trend, like Amgen, GSK, AstraZeneca. Now, health care is normally seen as defensive plays, but you're not seeing that play out today across the board. It is hard to know exactly how these tariffs are affecting different companies because the supply chains are a little bit more opaque. You might know where the factories are, but you don't know where the drugs are exactly going. But we don't expect that pharma will have as much of an impact as some of the other industries out there. Scott. Angelica, thank you for that. Angelica Peebles. Let's bring in Courtney Garcia of Payne Capital Management.

Now, Max Kettner of HSBC Global Research. Courtney's a CNBC contributor. It's good to have you both with us. What do you make, Court, of this price action today, which has, as we said, been quite interesting? Carrie Firestone, I might add, on the halftime report today, said when we were almost at the lows, hey, I wonder if we're going to finish positive today on the S&P, and maybe she will end up being correct. Yeah, which I don't think anybody saw coming into today how much a lot of these sectors were going to bounce. But I think that is a positive that you're seeing.

There is a lot of dip buying opportunities that are being taken, which I think is an opportunity you want to take advantage of, because I think these tariffs are something where everybody thought this was a negotiation tactic. Clearly, we realized, OK, these are actually going in. And now you're seeing the markets are repricing this risk. But now that it's here and they're in effect, I think the markets are going to price it and move on from that. And that's really what you're seeing in the action today, which I think is overly a positive sign. Max, you have remained bullish this market from afar, but now you have made the trip across the pond, as they say, from London to the United States. We have tariffs, as you might have heard. Does it make you less bullish? No, no. I think we're talking perhaps a little bit too much about it. I think when we look at the,

you know, the numbers overall, the earnings impact that we're seeing both in Europe and in the US is probably not as much as we think. Overall, the revenue exposure isn't that big even in Europe to the US. I think more importantly, when we look at particularly hours of shorter-term sentiment and position indicators, what we've seen the last few days, it took a couple of percent of a bit of a drawdown. Let's be honest, we're talking as if the market is down 20 percent. Like when I'm talking to clients now in New York, it genuinely feels like we're in the middle of a bear market. The Nasdaq, let's be fair, has been in a correction. It was down 5 percent. I mean,

it's not the end of the world, right? When we look at high yield spreads, emerging market debt spread, those, come on, those things, they've widened like 10, 15, 20 bps. So what? That happens, right? And, you know, 5% drawdown. You get that, what, once or twice a year? Yeah, cool, fine. So, you know, you move on.

I think the interesting thing that we've got now is when we look at our positioning stuff, whether that's VIX futures curves or hedging demand, whether you look at put-call ratios in equities and rates and credit, that's already super bearish. You look at, you know, obviously retail sentiment is tanked last week. There's loads and loads and loads of those shorter-term positioning things that are actually already flashing oversold with that little of a drawdown. Is this a buying opportunity, Court, as some have suggested? You know, some very high level market watchers have said if there's a big drawdown, buy it.

It absolutely is. But I think this is something Liz pointed on earlier that I think is spot on, where there has been a rotation that's been happening this year. And I think that's something you still want to focus on. So as you're getting your money reinvested, I don't think you want to go in all in on the MAG7 or the NASDAQ. I think you want to make sure you're broadening out because as much as we're talking about how much the S&P 500 is down, it's basically flat for the year to a little down. But you have, what is it, health care is up 8%. Real estate is up between 6% and 7%. Financial is up between 6% and 7%. There's a lot of areas of the market that are still doing well this year. And I think that that rotation is probably going to continue,

and that's what you want to think about when you're reinvesting. You're talking about broadening out at the sector level, not necessarily the market cap level, right? I mean, were you thinking that small caps were going to do pretty well this year? We were. That was the whole post-election, which clearly has not come to fruition, and I think a lot of that is with hesitation of where the economy is going and the consumer pulling back. For sure. But yes, across different market caps, but also across the world, right? I mean, not only here in the U.S., you're seeing Europe and even China actually outperforming even today.

China is still up even on this news. So yes, when I'm talking about broadening out, I do mean over the entire market. Some of those sectors like small small caps, might not have panned out. But I do think generally you still want to make sure you're broad here. Eddie, see that? I think so. I think, you know, if you go to Europe, I think we'd be talking way, way differently than we're talking right here. You wouldn't be talking about a bit of a drawdown. You'd be talking about we're entering a bull market.

You guys were talking about banks and financials getting hammered today. You look at European banks, they're up 30%. It's rock and roll, right? It's rock and roll. We get, you know, we get maybe close to a trillion euros more spending out of Germany. That ought to be good for the economy. That ought to be good. Well, that's why people have been saying that maybe you're going to get a better bank for your buck now outside the U.S.

I think it's both. I think it's both because, you know, as much we've given up on US exceptionalism within two months. Let's be honest, two months ago, the narrative and the consensus was buy the US, buy the US dollar, shun everything else. You don't even have to look at anything else.

Just buy the S&P and just avoid everything else. Two months later, we're basically pretending as if US exceptionalism has died and it's only Europe and it's only China and nothing else. Two months later, we're basically pretending as if US exceptionalism has died. And it's only Europe and it's only China and nothing else. I can honestly see a case, and to your point earlier, is this a buying opportunity? I can honestly see a case where you look at the drawdown of the Magnificent Seven. Let's be honest, four of the Magnificent Seven got absolutely slammed after earnings, after Q4 earnings. That's not justified, right? Like, we're talking about some of those names, like Nvidia's like, oh, maybe they'll grow earnings only 65% of 70. I mean, come on, no? And then like, oh yeah, that needs to be 30% down. Really? On that kind of news? No,

that's way, way, way overdone to me. So even in the Max 7, even in tech, and then overall, then obviously in the US, I think you want to buy that as well. It's not a point of buying Europe over the US, it's buying Europe and China and the US. It's I think you want to buy that as well. It's not a point of buying Europe over the U.S. It's buying Europe and China and the U.S. It's actually really broadly where things are still pretty all right. We will leave it there. That's probably a good place to do that. Of course, it's nice to see you here at Post 9. And welcome to our set here at the New York Stock Exchange. This is Max Kettner. Let's send it to Christina Partsenevelos now for a look at the biggest names moving into the close. Christina. Thank you, Scott. Well, Okta shares soaring right now on better than expected Q4 results. This is a cloud-based

software provider. It saw record profitability and cash flow boosted by an accelerating subscription backlog. They also issued a rosy outlook compared to larger peers like Salesforce as well as ServiceNow, and that's why shares are popping over 22 percent, its third best day on record. Shares of Hong Kong conglomerate CK Hutchinson popping after it sold its controlling stake in a Panama Canal port operator. And they sold it to a group led by BlackRock. The $22.8 billion sale also includes dozens of ports in other countries. The move is considered a big win for President Trump, who has aimed to curb China's influence in the canal. And shares are up of CK 23%.

Scott? Christina, thank you so much. Christina Partsenevelos. We are just getting started here and the market is continuing to get better. Up next, Plexo Capital's Lo Tony is standing by to tell us how he's playing the tech space right now in the face of those new tariffs.

He will join me right after the break. We're live at the New York Stock Exchange and you are watching Closing Bell on CNBC. All right, welcome back to the bell. Apple could be caught in the crosshairs of President Trump's tariff. Steve Kovach here with what's at stake. And it would seem to be a lot, Steve. Yeah, exactly, Scott. And let's try to game out what's at stake here, really, because that first round of tariffs, not that they've been doubled. Analysts have been saying to expect a low single-digit percentage hit to earnings.

We'll see what they have to say for this round. I'm expecting those estimates to come in either tomorrow or the next day. The big question, though, is price increases and new products coming out. A couple weeks ago, we got that iPhone 16E. It did have a price increase. Unclear if that's due to tariffs or what, but it's $170 more than its predecessor. And just this morning, that new iPad Air starting at $599. That's the same price as last year's version, so no price increase there.

But we're expecting one more new product this week, the MacBook Air. That could also see a price increase. We'll compare that when we get that announcement. But so far, Apple has been largely silent on the tariff impacts. The most important thing to watch is iPhone pricing, as the company is not going to really be able to shift its supply that it makes those phones in India from China and into the U.S. And by the way, we got those Best Buy CEO comments today on their earnings saying to expect price increases from its vendors, which includes Apple, by the way, along with so many other PC makers. And I'll just add in Microsoft is feeling it, too, because when those PC makers take a hit, it takes a hit to Windows revenue as well. CFO was warning about that on its last earnings call. Scott, Are you surprised, or the people that you're talking to at all, Steve, surprised at how

reasonably well Apple has traded, knowing that all of this was happening, knowing the number of chip components it gets from China is a big deal, knowing the amount of revenues they get from China is a big deal, and yet this stock has traded better than most of the others in that group. Yes and no. One, you got the buybacks coming up and that we're expecting that in the next earnings call. And on the second part of that is there was this idea going into this Trump administration that Tim Cook would be able to pull off what he did in the first Trump administration, either dodge those tariffs or that Trump would kind of back off on his claims that he'd do the

sweeping tariffs and they'd be more surgical like they were in the first administration. That was kind of the belief, I feel like, within Apple that they would be able to get a reprieve again. And that's clearly not happening yet. So we'll see how long this lasts and how much more pressure Apple can take on the pricing front before they have to change something or just eat those costs themselves. Unless some of the telecom companies are the ones who end up helping to eat it. And that's true. In the subsidies that they already do. Then that's super expensive customer acquisition for the T-Mobiles and Verizons of the world. They're already doing that. You see the same commercials I do where they say,

trade in your old phone and we'll give you a new one for free. They're eating that cost up front as well. So maybe they eat into it still. But at the same time, someone's paying for the phone. Someone's paying for the hardware, whether it's you through your contract with Verizon or whoever, or just paying it straight up, out of pocket, paying for cash straight up. Yeah, we'll see.

I mean, the New York Fed president's on the tape, William, saying that he sees a very high pass-through of tariffs to consumers. So we shall see. Steve, thank you. Thanks, Steve Kovach. Joining me now is Plexo Capital's Lowe Tony. He is a CNBC contributor. It's good to see you. Welcome back. Let me just stick with Apple for a minute. Your view from where you sit of how this particular stock has traded and maybe more so how you see it in the context of what seems to be a fast-developing trade war. Right, and I think it was well laid out in your last conversation.

I think the thought was that the ability for Tim Cook to pilgrimage down to Mar-a-Lago and achieve what he did last time, clearly that's not going to be the case. And so, you know, it's well laid out, right? It's either maybe Apple can squeeze the suppliers a little bit, but I think that's probably already happened as a natural course of business. The ability for it to be subsidized by the telcos, pass it on to the consumer or just eat it themselves. So it's going to impact someone somehow. When you look at the bigger picture, Lo, of what appears to be a quest, if you will,

for a new world order as it relates to tech, as it relates to manufacturing, how do you think about it on the bigger scale of what that will mean and the transition and the timing that all of it will take to actually come to fruition? Well, we've seen over the course of the past few years the look to diversify supply chains for the larger companies, whether they're tech or not. I mean, every company is almost in some ways a tech company based on the components for its products. But for tech companies in particular,

there's been a move towards diversification. And we've in particular seen that with Apple, although Apple does have a large reliance on China. I think what we'll see moving forward is a continuation of the diversification. But in particular, your point about this new world order. Yeah, I think we will see some onshoring. So bringing a lot of that manufacturing back to to the states, I think in particular with chips and the importance of chips, both from the competitive nature of chips, but also, I think the importance that we're seeing within the context of, you know, again, this new world order and global security. So I think we will see, you know, a shift, but that is, it's really hard to, to not have some of these components in other

locations that have really, you know, been able to, to refine the process for some of these manufacturing techniques used. So in some instances, we have a long way to go if the objective would be to bring some of that back to the states. But I mean, there are many who believe in this administration's vision and say, why shouldn't we be manufacturing more semiconductor chips in this country? They're the lifeblood of everything. Some of the best countries, the companies in the world are American companies. Why shouldn't they be making more of these components here? Yeah, no, absolutely.

And I believe that as well. It's just going to take the investment to do so, which we're seeing, right? We're seeing large, massive amounts being invested. It'll take, you know, training the workforce to be able to work within these more technical focused manufacturing processes. It'll take these more advanced manufacturing processes that involve robotics and other high tech techniques to be able to produce these at scale at a lower cost, minimizing the human component. So I think, again, speaking within the context of this new world order, the competitiveness, both for what we need to achieve as an economy within the United States, but I also don't want to minimize what I think is the importance of the ability for, you know, this new global world order and kind of the ability for the states,

the United States, to be able to play an important role, the leadership role. We're already seeing that as well with, you know, some of the policies around AI, for example. It's very important, I believe, for the United States to maintain that competitive nature throughout the entire supply chain. Lo, we'll see you soon. Appreciate your insight very much on a very important day. Lo, Tony. Up next, we'll have much more on today's market sell-off, plus President Trump's trade war potentially putting the World Cup organizers in an interesting spot. Why? Because it's being jointly hosted by the United States, Canada and Mexico. We will discuss with Alex Lazzari. He is the CEO of the

FIFA World Cup host committee here in the New York and New Jersey area. We'll be right back. President Trump's trade war leaving organizers of next year's World Cup in a pretty interesting place, given the tournament is being jointly hosted by the United States, Canada and Mexico. Alex Lasry was just named CEO of the New York, New Jersey Organizing Committee. He joins me here at Post 9. Welcome. It's good to have you. Thanks so much for having me. Especially on a day like today. This is pretty interesting for you. How are you thinking about

this? I mean, look, my job as the CEO of the New York, New Jersey World Cup Host Committee is to make sure that I'm able to help put on a once-in-a-generation and really once-in-a-lifetime event. We haven't had the World Cup in the New York, New Jersey region and in the United States in 30 years. And so this is going to be an event that's going to have billions of dollars of economic impact to the region, create thousands of jobs, and one that I think is going to be really special for the United States of America.

It's a long way off, obviously. You've been around the political game for a bit in your life. You know how quickly things can change, obviously. Do you think it matters whether these three nations get along to host a great event? I think one thing that's really great about sports is it's such a uniting factor. I mean, I think when you look at, you know, politics that goes around all over the world, no matter what, the Olympics still get played. And I think when you're looking at the World Cup, no matter what, we're going to make sure that the World Cup is going to be played and that

it's going to be an incredible event. And the fact that we get to do this all across North America and Canada is, I think, going to make this not just the most special World Cup, but I think the biggest World Cup that's ever been played. Have the final here in New York, New Jersey area, obviously, and a bunch of other games. What's the most important thing that has to happen for you to pull off a great event? We got to make sure that we kind of handle the basics, right? So the games inside MetLife Stadium are going to be fantastic. What we have to make sure is that people are able to get to the games in a good and reasonable amount of time and make sure that it's safe and secure. We want to make sure that every fan has an incredible experience. And so our number one job and goal

is to make sure that the fan experience is the top priority, and then to make sure that, you know, the city and state and both states benefit from the economic impact that's going to take place. I've read some news articles that would suggest there's a long way to go for this country in general, not necessarily this area, from an infrastructure standpoint, that we're not ready, per se, to host the World Cup final, which, as you said, is bigger than it's ever been. How would you answer that? I wouldn't say that we're not ready. I mean, we're putting all of the infrastructure and

steps in place. We've got great partnerships with the state of New Jersey, the state of New York, and the city of New York, not to mention with FIFA also. I've been meeting with elected leaders, city officials, and FIFA to make sure that this is, you know, that we're going to put on an incredible games. And I think this is going to be the biggest and most successful World Cup ever. And the fact that we have the finals is a big deal. And we were given the finals for a reason, because this is New York, New Jersey. How are you thinking about the kind of economic impact that all of this is going to have, not only on this area, but as you think of just the collective tournament itself for other cities, too?

I mean, the economic impact is going to be massive. I mean, you're going to have millions of people, especially coming to the New York, New Jersey area, where a vast majority are never going to step foot into MetLife Stadium. So they're going to be celebrating with their fellow countrymen, with Americans, and with the city and states, and going to restaurants, bars, staying in hotels. The economic impact of this is going to be massive, and I don't think we fully understand the scope of this yet. And that's going to be our job to help make sure that everyone really understands how big of an event that this is going to be. When do you actually start, you know, ramping up your efforts to get spectators engaged, fans in

this area? You go around New York City any time there's a soccer game on, and it's obviously crowded in certain sections and bars of the city. But at what point do you really start to engage with people? So we're starting that now. I mean, we just announced this Sonic ID today. But I think, though, the one year out in June is going to be the real moment where we really press play and we start to really engage New York, New Jersey, and the fans and start to

really let everyone know the World Cup's going to be here in a year, and it's time that everyone starts to pay attention and starts to really feel the impact. How much does it matter whether the U.S. team does well or not? It seems obviously undergone some changes in its own right. I mean, I have all the confidence in the world that the U.S. fans are going to help make sure that the U.S. team goes very far in this tournament. But this is a global sport, and I think what we're looking for from this World Cup is to engage the international fan base.

And I think when you're looking at how do we grow soccer more, that's making sure that we start to make America, soccer one of America's big sports. Well, we are excited about it. Interesting day, as I said, to have you, but we're glad to have you join us and talk about this. Alex, thanks. Thanks so much. That's Alex Lasry right here at Post 9.

Up next, we hear from the former Dallas Fed President Richard Fisher. He's also a former deputy U.S. trade representative. He'll tell us what he thinks about these new tariffs and what it could mean for the economy and the Fed. Closing bell is coming right back. Fears of a slowdown in the economy hitting stocks lately and making the Fed's road ahead. All that more unclear. Today's tariff announcements only adding to that uncertainty. For more, let's bring in the former Dallas Fed President Richard Fisher. Always good to have you, especially when we're trying to

make sense of all this. Let me just ask you from a fundamental standpoint, do monetary policy people think of tariffs as a tax? Well, I'm going to refer to our president's favorite reference, which is common sense. And common sense tells you that it is a cost factor that goes into producing or distributing a product. In that way, it is a tax. And what business operators, big or small, have to figure out is how do they protect their margins against that impact? And how much are they willing to change the price of their product or their service if it's applied in order to make sure they maintain their margins over time? So in that sense, yes, it is a cost factor and I would consider it a tax. And then the question is,

of course, how much revenue would be raised by this, particularly if it slows down the economy, Scott. And that is one of the other risks that the Fed has to face, which is it gives you a little inflationary bump. The question is how long it takes to be digested. I would argue that it takes time because businesses don't just change something overnight. They see what their customers are willing to bear. And then the only way to offset the threat to margins on the cost side is to ramp up your productivity, which isn't done overnight either. So it has both a slowing effect on decision making, which could lead to a slower economy, as Goldman Sachs and others have come out today to talk about.

At the same time, it increases prices in particular areas, especially now that Canada, for example, is retaliating not just on electricity. You have to realize they provide potash, which is the key ingredient for our corn farmers. And now the Chinese have said, in retaliation, they're going to go after all our farm products. And Scott, I'm a Texan. You can't live here without guacamole. And the most upsetting to me is the avocado. Most likely to have the imported avocados from Mexico. Well, I think it's fair to say it's hard to live most anywhere

without guacamole every now and then. So I'm with you on that. Let me ask you this. The New York Fed president, John Williams, says that he sees a very high pass-through of tariffs to consumers. You talked about, you know, sort of what's at play and what's at stake. That would seemingly put the Fed at this very moment in a pretty difficult position.

Well, first of all, I have high respect for John. He's one of the smarter people I ever served with, and he's very thoughtful in his analysis. It's a question of what's likely to ensue here. You would make a decision based on one move. Again, we are told that President Trump is a negotiator. He has some objectives here. We'll see if he does what he did before, maybe not levy them at the same degree, maybe pull back on some or maybe add more. So it's a little bit too early, Scott, to really get a sense of how the Fed might react. The Fed is bringing inflation down. We're getting closer to the 2 percent target. But at the same time, as I mentioned earlier, tariffs increase the cost of doing business, and that has to be passed on. Then the question is, how much does it slow down the economy? And I think we have to wait and see. This may be a clever strategy on

behalf of the president. We're just going to have to wait and see. And it won't be digested overnight. It will be passed through. The question is over what time frame and what kind of reaction consumers, but importantly, the people that distribute products, services, goods, what kind of reaction they pursue and how long it takes to be digested. That's what I would be looking at if I were still a member of the FOMC. But do you think that it's prudent for your former colleagues, some of whom are still there, some, you know, are not, that they should start rethinking longer running inflation expectations, just given what the agenda from this administration seems to be.

And it is, as I described to a prior guest today, a new world order. They want to bring more manufacturing of critical products back to this country, which theoretically, which would lead to more inflation, right? Wages would be higher here than they are elsewhere. Is the Fed currently thinking about that? And if not, should they be? I'm sure they are. I think they should. And they're going to have to consider in their economic models, whether it's the big economic model of the U.S. economy called FURBIS, or just in terms of listening, as they do very carefully, particularly through the 12 bank presidents, to what they're hearing in their local districts.

I had all of Texas, part of New Mexico, and part of Louisiana. I listened very carefully to what people were telling me, and that's how we got ahead of the curve on the housing crisis in 08 and 09. So it doesn't always appear in your model, Scott. You have to listen carefully and then build that into your thinking, into your models.

And it'll take time for them to model this out because we're not certain exactly what the president's going to do. And uncertainty is the enemy of decision making, as you know, and every business operator knows. So what I'm seeing, Scott, is people are holding back, trying to figure out what the heck's going on. And, you know, I hope the president is successful here. But common sense tells me it's going to have an inflationary impact. And it's also going to lead to some slowdown unless we can figure out a way to harness very quickly AI, et cetera, to enhance productivity. And if we do, that's going to hurt the employment numbers as well. We'll leave it there.

Richard, I'll talk to you soon. Be well. All right. Enjoy that guacamole. You as well. That's Richard Fisher. Up next, industrials getting slammed in today's session. Coming up, we break down the moves in that space inside the Market Zone. All right, we're we now the closing about market zone CBC senior markets commentator Mike Santoli here

to break down these crucial moments of the trading day. Plus two sectors hit hard in this sell off today Courtney Reagan on discretionary stocks. Seema Modi on industrials Michael I'll begin with you- what happened to the comeback.

Where did it go. All we know is incredibly erratic trading under the stress of what could have been a pullback that was culminating, and it hit a lot of technical trigger points. Really was a ferocious and I think surprising intraday rally in terms of turning green and just tagging that again. I feel as if we're in a little bit of, you know, we're playing the technical ping pong game a little bit too cute. Didn't even get to the 200 day average of the S&P 500. The buyers came in, didn't even get to a 10 percent correction in the Nasdaq 100. Buyers came in. So we're trying it. I do think it's fair to say over the course of eight trading sessions, the S&P down almost 7 percent. This idea that we have a bit of a growth scare, this idea that the bond market's pricing that in is no longer a secret. It's no longer something that people are doubting and are

looking past. And so maybe there was a short term conclusion that, you know, we pretty much accounted for what we know at this point. There was a lot of jockeying about what might or might not be announced or hinted at in terms of the president's speech tonight, in terms of other deals, whether in fact there were signs of negotiation and softening on the tariffs, we just don't know. What you can say is, you know, the market remains in this prove-it mode. We simply don't know if we've gotten to a point where you can say that we've taken measure of all the known uncertainty. Names especially sensitive to the economy are really having a hard day.

The banks are the group that we need to talk about. Cities down almost 7 percent. Bank of America almost 7 percent. So Morgan Stanley more than 6. That gives you the picture there. Airlines getting hit hard. Cruises. Hotels. Booking services. picture there. Airlines getting hit hard. Cruises, hotels,

booking services, retail. No doubt about it. That's just your linear read through of there's an extra little dose of economic pressure going on right now. The bank's pullback, as sharp and sudden as it was this morning, it almost read to, I think, a lot of traders as a net positive because they were the ones hanging out there, kind of bucking the trend, trying to hold on to a leadership position. And a lot of times over the course of a rolling sell-off, you want to get to those stalwarts to give the idea that there's nowhere else to hide and everybody's been repriced. And what's working today is, of course, the non-cyclical mega cap growth stocks

that let us down, that got a little bit cheaper, that are not really tariff exposed. So it makes sense what's going on. What you don't know is how far these prices have to move to find people with real long-term conviction. Is the 200-day average where the patient money comes in, or is it where the traders kind of, you know, pull the ripcord? Yeah. Courtney Reagan, tell us more, especially about the retail names, which are really front and center for your beat. It's Target, obviously, which might have started that.

Gaps Week today. You tell us what you're watching here. I mean, pretty much all of them, Scott. I mean, consumer discretionary stocks eating crushed, if you're looking sector by sector. And the XLY consumer discretionary ETF is also down 9% for the month. I mean, that's well worse than the major indices in anticipation of what is now tariff reality, right?

We didn't know for a while, and now we do. Best Buy, as you point out, the worst retail performer after warning about tariff-induced price increases to come, which is really overshadowing. It's better than expected results that were also out today. Similar story for Target. Its CEO warning prices will go up within days on grocery items that come from Mexico, for example.

And those retail CEO comments then are dragging down travel and leisure stocks, too. That's part of consumer discretionary sector, as we know. If your strawberries and your computers are costing more, then maybe there's less money for that cruise. Look at the higher end stocks, though. Those also getting spooked. Tapestry, Ralph Lauren selling off. Dollar General, that's catching a bit. Maybe one of the very few in an environment where discounters can win on essentials. There are certain things we are still going to have to buy,

regardless of the price. Back over to you. All right, Court, thanks so much for that. That's Courtney Reagan. SEMA is following the industrials. I mean, financials, yes, they're the weakest. Industrials are next. Yeah, that's right, Scott. As a whole, industrials make about 20 percent of the North American manufacturing in Mexico and Canada. And we've seen several multinationals pivot away from China back in 2018 to these markets in hopes of avoiding a trade war. Boeing, which, as analysts at Jefferies point out, spend about $1 billion a year on Mexico's supply chain. And in Canada, Boeing's Winnipeg site employs about 1,500 people, producing hundreds of aviation parts. That's stocked down 6% today. Industrials with China

exposure, 3M, CAT, Cummins. Even though these players have diversified, their footprint are down around 1% to 5% right now. For U.S. manufacturers, Bank of America in total estimates a 10% tariff on imports will be about 120 basis point drag on margins. However, that really depends on the scale and duration of tariffs, which we just do not know right now, Scott. OK, Seema, thank you. That's Seema Modi. I'll send it back to Mike. About 90 seconds left. Variables on the plate for this market. President's speech tonight. See what he says and how the market takes whatever is delivered this evening with the joint session. Jobs report is looming as well. And then who knows what other headlines

come between here and there geopolitically. Exactly. We also we get ADP tomorrow. You know, you can kind of point and laugh at whether it matters. But I think right now we have a high sensitivity to whether the economy in the first quarter really fell by the wayside or if it was just a little softening up and its technical effects that's depressing the GDP estimates right now. So all those things obviously matter with through earnings. We kind of know what we're working with in terms of the immediate path, in terms of earnings. And then it gets to be a little bit of a sentiment game. And it's sort of did we get negative enough? Have you seen

enough people essentially give up on this? A lot of the premises we had coming into the year. Most of what we've seen in the last few weeks is the market rationalizing excessive expectations for perfect, smooth growth and deferred tariffs and a front loaded policy helping all the rest of it. Where are we in that process to me is a big question. Rates have helped you out here. And, you know, in six weeks you go up from 480 to 420 on the 10-year. That should at least bolster some parts of this market. And we knew that the messiest, messiest part of the policymaking process

is probably going to come on the early side of the advent. So we will see. I'll see you tomorrow, too, in the OC.