Closing Bell - Closing Bell: 4/8/25

Episode Date: April 8, 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.

Welcome to Closing Bell. I'm Scott Wabner live from Post9 right here at the New York Stock Exchange. This Make or Break Hour begins with these jittery markets, which are once again moving on every headline about the president's trade war. Let's show you the scorecard here with 60 to go in regulation. Once again, that doesn't really tell the story because we had a very strong bounce to start the day right up until midday. And that is when news hit that tariffs on China will go into effect at midnight tonight at 104 percent stocks began reversing there is your intraday of the Dow to give you a good picture We did dip negative when we've been volatile ever since and who knows where we're gonna end up We'll follow every tick of course names with heavy exposure to China turning red on that news and Largely staying there a few of them in front of you here Apple, Nike, Las Vegas, Sands to mention a few. Yields remain

an important story as well. They continue to move higher today for the most part. The two-year though the yields lower. We'll watch that keep an eye on it. All that plus a new and very public battle brewing between Elon Musk and Peter Navarro. That erupted on social media today, so we'll talk about that in a bit as well. We begin with our talk of the tape. What investors should do now following this historic market route. First, let's get the very latest from the White House. Our very own Eamon Javers has been chasing headlines, doing his own reporting today,

and some of these things have moved the market. It's been quite a day again. Yeah, it really has, Scott. and some of these things have moved the market. It's been quite a day again. Yeah, it really has, Scott. What I can tell you is that the White House is saying now that those tariffs on China are going into effect tonight at midnight, as you point out. Now, we haven't seen the paperwork on this yet,

and a White House official just told me they have no indication that the president is going to sign that additional 50 percent tariff on China in public on camera in any way that we can see even on social media. So we may just simply have to watch the federal register to see if that additional 50 percent retaliation on China that he talked about is signed at some point between now and midnight. I'm told it hasn't been yet. They expect it will be, but they don't expect that we'll see it in public. I asked Caroline Levitt, the White House press secretary, about this in the White House press

briefing a short time ago and when we might see those tariffs. And she confirmed that we will see them later today. And here's what she also said. That's why there will be 104 percent tariffs going into effect on China tonight at midnight. But the president believes that she and China want to make a deal. They just don't know how to get that started. And the president also wanted me to tell all of you that if China reaches out to make a deal, he'll be incredibly gracious, but he's going to do what's best for the American people. So Scott, on this question of whether this is a permanent tariff regime or whether this is a negotiation, the White House is leaning hard into negotiation mode here, pushing back sort of on the Navarro approach, which was

that this is not a negotiation. That seems to be resonating with financial markets, and the White House seems to be indicating that they're willing to do deals with countries around the world. But they want those countries to come to them and make their best offer, and they're waiting to hear from the Chinese guy. Yeah. You mentioned Navarro. Obviously everybody seemingly is talking today about this rift with Musk, which erupted on

social media. Last I saw the press secretary also, when asked about this, said, well, boys will be boys. What are you hearing? Yeah. I asked Caroline Levitt about that earlier today and she said whatever and she said, look, we're the most transparent administration in history. You can see what you can see right out in public.

And clearly the president is not going to stamp this out or at least not publicly be seen as stamping it out. Elon Musk posting on social media just a short time ago an additional insight against Peter Navarro. We haven't heard from Navarro here. So it's interesting this dynamic of sort of the richest man in the world who controls time ago an additional insight against Peter Navarro. We haven't heard from Navarro here. So it's interesting, this dynamic of sort of the richest man in the world who controls his own social media account is sort of hurling insults at the president's top trade advisor.

President's top trade advisor is, you know, sort of hard at work here at the White House. He's very close to the president. And we haven't seen a response from him. So is it the case that the White House only allows one person to go out and call other White House officials a moron or are we going to see that from Navarro soon as well or is that a strategic decision from Navarro? You know it's hard to sort of suss out all this. The sense here Scott is that Elon Musk is a shorter-term participant in the President's world than

Peter Navarro is, in the sense that Doge is going to expire, Musk's term here is going to expire. Peter Navarro has been at the President's side for years and years, went to jail out of loyalty to the President of the United States, politically out of loyalty to the President, and that relationship seems to be solid. But we'll see how the President responds to this. He sometimes enjoys watching these things and then steps in. Aiman, thank you very much.

Anything more, please let us know. It's Aiman on the North Lawn of the White House yet again for us. Let's bring in Ellen Zentner now of Morgan Stanley Wealth Management and Alicia Levine of BNY Wealth. It's great to have you both with us. You both have upped your recession probabilities

to 40 and 50%, respectively. What do you do? What are you telling clients in terms of these markets now? So I think it's important on the wealth side of the business that these are not tactical trading clients, they're longer term trading clients. And so with that longer term view, especially with retail, you want them to sit on their hands.

And that's really the only way that you can provide the calming voice and be the person of reason in the room. So, strategic allocation, if you move away from your targets, take the opportunity to get yourself back to those targets. So, if you now find yourself underweight equities, go ahead and add to that. Go ahead and rebalance your fixed income. But other than that, in these volatile markets,

you really don't wanna do much more. What's your sense of where this is all going? So look, we're in wealth also, and it's very similar to conversations about looking, investing for the long term rather than tactical trades. We do tactically make moves based on what we think is the next near term, say, six to 12 month outlook. We did take some risk off the table and moved

some equity allocation into fixed income to have, in a sense, as dry powder for when the environment becomes clearer. But the conversation is very similar to what Ellen's talking about, which is if you look over time, these kinds of drawdowns are very unnerving but also familiar. And as we've done the research, when the market is down 20% from the high, the forward 12 and 24 month, regardless of why it was down, tends to be extraordinarily positive, about 18 and 38%. I keep hearing that, but markets aren't usually down to the degree they were down in three days. That adds to the issue. It's harder to point to history.

This is a self-inflicted issue in the markets. Other things were caused by market related instances, you know, existential things that have happened. This was a self-inflicted sell-off caused from the White House. Correct. Doesn't that complicate the rebound? So it doesn't in our analysis because from here you could have extraordinary upside or extraordinary downside. You have a lot of volatility here. So

you know we're at a 50% chance of recession. The market is pricing in about a 60% chance of recession. So here we feel with the policy as stated the market is more or less where it should be. The issue is where does this change? And of course time is not on the market side. The longer

this takes to resolve the trade deals the worse the outlook side. The longer this takes to resolve the trade deals, the worse the outlook gets. But what you saw, from the low to the high, from Sunday night when the futures opened to earlier this morning, there was a 10% swing in the S&P, which is also extraordinary, which is telling you there's a coiled spring here if something goes right.

And so with the market pricing in about a 60% chance we think the markets are de-risked both sides of the equation here. How can the mark the first of all do you agree that the market is where it should be? I ask you that as I stated at the outset 40% recession risk raised 50% recession risk raised, 50% recession risk raised. But you're telling me the closer we get to the probability of a recession that the market where it is makes sense even at the multiple it's trading at, which is still 18 times based on earnings that may not come to fruition. I don't know how you square those two.

Tell me. So it's the pricing itself that's already got done the work. The pricing's already done the 50% probability of the recession. Obviously if things go on in this tit-for-tat way where there's a lot of announcements the negative we'd have to raise our probability there but from here it's actually too volatile and unknowable to where we're going. What we do know is we don't want our clients going to cash and we want clients to keep what their investing objectives are. That is the way you write out a market like this. You can know is we don't want our clients going to cash and we want clients to keep what their

investing objectives are. That is the way you write out a market like this. You can tactically add if markets go lower because what we know over time, we're not destroying the world. The closest we got to destroying the world is probably the global financial crisis or COVID when we shut down 60% of GDP. This is not that. This is a readjustment in the trade system and the markets will work it out.

It's not like just some simple readjustment. On the idea of dry powder and what you're urging longer term investors to do, I interviewed Jeffrey Gundlach yesterday in the midst of all this. I want you to listen to what he said about what he's doing with some cash. We have a lot of dry powder. And I talked about cash as a recommendation on fed days for the past few fed days, as much as 25 or 30% cash. I would not be deploying that cash yet. I think you're kind of in the middle innings of this thing. Although certainly the market going down so much

on Thursday and Friday, you know, it's a little bit disconcerting that we don't have more of a bounce in the market. All right. That's Gunnlock with us yesterday right here on Closing Bill. What do you think about that statement? So let me say something humbling. He has no idea where markets are going. No one can say they have an idea where markets are going.

As you pointed out, it's a self-inflicted wound. Fiscal government is not going to step in here to provide stimulus to offset this. Fiscal government is the cause of it. The Fed is not swooping in to save us from tariffs. And so, you know, we think that 4,600 on S&P is probably a market that has fully 100% discounted recession. So there's more room to go there. Okay, he suggested 4,500 yesterday too. So, there's in the ballpark. But at the same time, Alicia pointed out

that you could get some really big jump to the upside, but it would take this president capitulating, and I don't think we're seeing any evidence of that. Are you guys trying to figure out in your own minds as you think about where these markets might go with what this is all really about? I mean, you mentioned a readjustment, I think was the word you used to trade. It's not a readjustment if the president thinks that you can make 1950 great again and that you can have all these factories

with Americans sitting shoulder to shoulder, or factories filled with robots, or is it a means to get revenue to pay for the tax cuts? Are you thinking about trying to game out what you think is the outcome here, what the true motive is, what the intent might be? Yes, and that's very important. And what we've heard from the White House and spokespeople from the White House is that actually there are very many different motives here.

Our fundamental base case here is that we end up with some tariffs, likely a 10% tariff, universal tariff. Permanent. Permanent, permanent. But that is still workable for the U.S. economy. The extra $450 billion of tariffs that was announced last week is not workable for the U.S. economy. And the question is how quickly do those actually come down? So it's, I don't know what's in the president's head, but there is some combination of a revenue raise with a better trade environment for US companies.

There were two failures of the Trump administration. And this is the Trump administration that believes there were two big failures that they're trying to correct. The fentanyl is one and tariffs are the other. And tariffs, rebalancing global trade is going to be his legacy. And presidents have a short amount of time

to get things done. So we are trying to make a strategic tectonic shift that takes place typically over a decade or decades in just a year or two. That's what Ken Griffin was talking about within the last 24 hours. Exactly the same thing. The unintended consequence of that, if you're rebalancing global trade, if you are rebalancing global defense, is capital outflows from the US.

So you're losing a bit of that US exceptionalism shine. And the unintended consequence of that is that financial markets suffer. I, every time you're on our program, I can't help myself, I think back to when you're sitting next to the Fed chair, you know, and it wasn't that long ago. It wasn't. And they seem to be the conversation you're having, of course, for those who don't remember

that moment. Maybe it was at the Economic Club of New York. The place that they thought they were in at the moment that you were sitting on the stage with the Fed chair is so far different from the place they find themselves now. At that time, Chair Powell, that was for the NAIB conference in Nashville because he was gearing up to play guitar. So-

He was in the guitar playing mood because they thought that they were in a good spot. He really loved the productivity numbers he was seeing. He really liked the GDP revisions. They were coming close to the end. They felt they were getting close to cutting enough and that he was really guiding the economy into this nice glide path. Now they're sitting in the toughest spot ever with slowing growth to probably less than

1% GDP this year and higher inflation. And if you're a Fed and you grew up, Fed member and you grew up through the 70s like I did, you're terrified of inflation expectations becoming unanchored and growth being slow. And so right now, the data's okay. They can afford to just sit here. He went from playing the guitar to some singing a stagflationary tune right now, which might be the worst possible outcome for a Federal Reserve. I bring it up because Goolsbee, Austin Goolsbee, the Chicago Fed president, was having a conversation

on public radio today where he said the tariffs are much more than we'd been modeling. It's not obvious how the Fed would react to a negative supply shock. Sentiment measures are almost cratering. That's a concern. There are two things that people have always assumed with this president and this Fed. You have the Trump put and the Fed put. Well, right now it doesn't appear that there's a Trump put, at least not at these levels, maybe a lot lower, I don't know. And maybe the same can

be said frankly for the Federal Reserve because as Ellen said they're in a tough spot. They keep making the case that they're not ready to cut right now at all. Yeah I mean it feels a little bit like a game of chicken between the Fed and the White House right now. Who's going to blink first and where's that put going to be? Like, it does feel like the put is lower than that. Having said that, I'm sure the immediate sell-off in the market had the White House on notice as well. Had a lot of people on notice.

I'll tell you that, I mean, because they've been speaking out, you know, one by one. I mean, the billionaire class that was very much, many people who were very much behind the president when he was getting elected, is suddenly like, what in the world is going on? So look, the Treasury secretary went on CNBC this morning and talked about the 70 countries calling up. That was probably strategic to send a sign that this is not the final tariff number. I think it's going to be a back and forth between those who want a lower tariff globally

and the Peter Navarro's of the world. But ultimately, it's the noise itself that's going to be difficult for the market. In any case, we wouldn't expect a V-shaped recovery here because this is going to be fought out and it's very uncertain and very hard to model where this is going. Ultimately what we know if you go back in history these moments where it feels like this time it's different because it's horrible turns out there's some rhyme over history and we think a bit lower as you get to that place where you can look forward and start investing. Last point, Hume.

I think the pain point for Trump now we've, is not the markets, it's support. So if his approval ratings start to really fall, then you'll get the Republican leadership distancing themselves from him as we reach midterms. For the Fed, the put is really corporate credit spreads. And financing is open. It's looking okay. Well, I mean, spreads have started blowing out last week. Spreads have widened, but the financing levels are still okay.

And in 2019, until they moved to the sidelines and started cutting, it was that financing levels, funding levels still looked okay. And once they didn't anymore, then the Fed stepped in. I was going to say, you want something that's going to get the Fed's attention? Yeah. Ladies, thanks so much. It's been great having you both. Alicia and Ellen, we'll see you soon.

Thank you. Thank you. Top Apple analyst just cutting his price target and a familiar one to all of you who watch this program. Steve Kovach is here with those details. Steve? Yeah, Scott. Let me put this in perspective for you, what Apple investors are facing as we get nine

hours away from those 100% tariffs on Apple. Morgan Stanley, Eric Woodring over there, he was among many firms lowering the price target on Apple today. Let me read you this quote from what his note said. Quote, it remains to be seen when or how Apple will raise their device prices, but pricier devices should still lead to lower volume.

In general, he goes on to say they're gonna lower their revenue estimates for the fiscal year of 2025, three to eight percent. iPhone shipments lowering their estimates three to 14 percent. And this is all coming, Scott, as we have these discussions, people trying to figure out what Apple is going to do to respond to these tariffs. We've gotten no word from Apple itself and just a bunch of misinformation from the White House about Apple's

Capabilities of bringing iPhone manufacturing here. There's a report in the Wall Street Journal yesterday saying some Manufacturing is being shifted over to India which has that lower 26% tariff rate on it But again that is nowhere close to the manufacturing Apple would need to make up the slack to meet the demand of iPhones here in the United States So it's it's no matter what we're looking at here It's likely going to be some price increases UBS put out a note yesterday kind of estimating What those price increases would look like on those pro models of the iPhone 16 that are out right now

They're talking about a couple hundred bucks Price increases obviously Apple would have to eat the rest of it But we're looking at a really hairy situation here because because it's not just China, it's not just India. There's a lot of production going on in Vietnam, especially for accessories like the Apple Watch and AirPods, and then other countries like Malaysia. You have those MacBooks being produced in various other countries as well. So look, again, nine hours out and we just have zero clarity on what this is gonna look like for Apple and we see it reacting today.

Since your program started, it's down 5% now. It was down under 4% Scott, before we started this hour. Yeah, that's why the Dow is weakening as we speak as well. If we can show an intraday there. Steve, thanks so much for that, for setting that up well for us. That's Steve Kovac, but take a look at the Dow too. Dow's down 433.

Again, you start with a tremendous bounce back to start the day. You get the headline during halftime today that these tariffs more than 100% on China go into effect at midnight tonight. You start, you can see where the sell-off started there around the noon hour, just prior to that. And it's been kind of a steady drip since then.

And now we are where we are. We'll follow it, of course. Let's welcome in now Sung Cho. He's co-head of public tech investing at Goldman Sachs Asset Management. Here with us as you see it, Post9. Welcome, it's nice to see you. Good to see you again.

Man, I mean, Apple down 5%. Just your comments on how this stock is traded. Woodring over Morgan Stanley starts to take his numbers down. I mean, we're talking really well-respected analysts who are taking a look at this now and saying we've got a problem. Look, I certainly think that we've priced in

a lot of negativity, but in terms of what could go right, let's talk a little bit about what could go right with Apple, right? Yeah, that's how I see it. So, you know, I think, first of all, I think they do have more pricing flex in their business model,

especially in the US, where a lot of the carriers have been subsidizing a lot of these pricing increases. So we do think they have the ability to be able to price a little bit better than the market anticipates. Secondly, they do have more flexibility in the supply chain, right? And we're gonna figure out where is the right place

in the supply chain to build, but they do have a lot of supply chain flex that they're gonna be able to do. And then on top of it, they do have a lot of balance sheet power as well, right? And then the last thing I was going to point out is, look, from an AI perspective, there's going to be a lot of innovation coming, right?

And every innovation, consumer innovation, is going to have to flow through the App Store, right? So to the extent that you believe that applications, the new applications are going to take off, it has to go through Apple, right? And so there's a you believe that application and new applications are going to take off, it has to go through Apple, right? And so there's a lot of things that they can do to adjust right now, obviously, the near term is, is very, very, you know, highly negative. But there are things

that they can do to respond to make this part of the issue too, is, you know, notwithstanding the tariffs, there was already a belief that they dropped the ball related to AI. Yeah, you can't just fix that overnight. I hear you when you talk about the flex they may have with supply chain issues, Wall Street Journal reporting earlier today that they could move some capacity to India,

but these things don't happen overnight. Look, I think it's a very harsh statement to say that they've dropped the ball on AI. Look, I think they maybe should have been a little bit quicker to respond to it, but most of what we've seen so far is the build out of the infrastructure of AI, and they're clearly don't want to be part of the build out

of the infrastructure of AI, but they are going to be there when consumer applications really start to take off. So it's your largest tech holding, correct? That is correct. Along with a number of these other mega caps, Microsoft and Meta, Nvidia, Amazon, Alphabet. I mean those six stocks are your largest holdings out of your out of your top ten. Yeah. Where are these things going from here?

Look tech has led the downturn right and we've seen a lot of de-grossing activity in the tech space but you have to look at where valuations were and where valuations are now today. So tech has been about a 20% premium to the S&P 500 over a very, very long period of time. At the top, we were, and when the enthusiasm around AI really got going, we were at about a 30% premium. Right now, we're at a 7% premium. So this is the lowest premium

that tech has seen in a long time. And if you step back and say, okay, look at the fundamentals around who can actually drive resilient business models in a tariff type environment, it is the tech stocks, right? And you have to think about it as they have more pricing, they have more competitive, you know, modes, so they do have a little bit more pricing power.

They do have cleaner balance sheets to be able to invest counter-cyclically, and they do have higher gross margins, right, and so I do think tech is going to be much more resilient. I think the earnings estimates for broader tech are going to hang in there a little bit more than people expect. And with the valuations being at a discount, we do think it's a good opportunity. I'm thinking about, you know, as I was writing it this is, as you say, a 7% premium, you know, right now, if the economic picture darkens.

Yeah. And we rethink earnings numbers more broadly and we decide that the overall multiple of the market needs to come much lower, then suddenly what is a 7% premium, even if it holds, is lower than it is now. That's one of the problems. So the market is basically telling you that the earnings estimate, revenue, the tech are going to be worse than what they see in the rest of the market is basically telling you that the earnings estimate riveted in tech are gonna be worse than what they see in the rest of the market. And we just don't fundamentally believe

that that's gonna be the case, right? The starting point around gross margins is much higher. They have more pricing power. They have the balance sheet to be able to flex. And they have durable growth characteristics like AI. And so we do think that the earnings power is gonna likely be much more resilient for tech. And so we do think that that's what's creating an opportunity for investors to start reallocating

to tech. Are they recession proof? They're not recession proof. Look, certainly like these these businesses are economically cyclical, just as everything else is. But we play in a relative world, right? And like, whether I do think right now they have defensive characteristics, but they also have offensive characteristics.

Think about that one hour where the market whipsawed up, what rallied were a lot of the AI related names. So there is this pent up demand to want to own tech. People are de-grossing right now, and you can only de-gross what you own, right? And people own tech, and so we do think that there's a lot of technical forces that are at work as well that are driving some of this correction

that's creating an opportunity. The place where there's been you know profound weakness certainly lately is the semis. Yes. There's also a belief that what was first in so to speak is first out. Yeah. Some of these have traded a little better lately now they're caught up obviously in some of the tariff conversation. How do you see that? So look I think semis have led tech has led the downturn semis have led the downturn, Semi's have led the downturn. I think there's been almost too much negativity now in terms of what's going on with AI and the AI infrastructure built. Right now we're transitioning from AI models that had very linear types of answers.

So you ask GPT a question and it gives you a very linear response. We're about to go into reasoning models, right? Reasoning models, you ask it a question, it'll remember all the questions that you've asked in the past, it'll also anticipate some of the questions that you're going to be asking. That's the next level of AI that we're about to produce and we talk about AI agents and all these things. Jensen more recently recently, a couple weeks ago, said that that kind of model is gonna require 100x the amount of compute. And so there's obviously more efficiencies

coming from Chinese models and things like that, but we do think we're still very much in the middle innings of this build, not in the late innings, and we think that some of the multiples have really retraced to very attractive levels. I appreciate getting your perspective. Thank you for being here.

Yeah, absolutely. All right, Sung Cho with GSAM, Goldman Sachs Asset Management. All right, let's send it over to Christina Partsenevel. Let's now for a look at the biggest names moving into the close. Hi, Christina. Hi, Scott.

Well, health insurers really rallying as the Trump administration announces a higher than expected hike for government payments to Medicare Advantage plans. UnitedHealth jumping almost 6% despite the sell-off on pace for its best day since November 2020. Humana, look at that, 10% on track for its best day since the pandemic.

And CVS also rising in the news, almost 6% higher. You're also seeing shares of Eli Lilly turning right now lower after rising on an upgrade from Goldman Sachs and Biden Neutral. It's been really a hard few months for this name. But analysts writing that the stock's current price point presents an enticing entry point, especially as the firm continues to maintain

a strong position, where else? In the obesity drug market. Shares are all flat to the positive right now. Scott? All right, we'll follow them. Christina, thank you. Christina Partzanevalos. We're just getting started here.

Up next, what a time to have the Dean of Valuation, Athwath Demotorin, he'll join us with how he's navigating President Trump's tariffs and trade war. We're live at the New York Stock Exchange. You're watching Closing Bell on CNBC. Welcome back. Markets are still on edge after a big two-day drop last week.

The Dean of Valuation, Athwath Demotorin of NYU Stern School of Business joins us now to discuss. Let me just get your take on what we've all been going through for the last handful of days. What you think about these markets? You know, look, it feels like the beginning of a shakedown. I mean, it's, you know, I remember crises past and the first shock is not always the end shock. There are aftershocks, as you saw today. While I've been waiting here, the Dow swung 150 points in either direction. And I remember, we're in weeks like these

after 2008 and 2020, where the market can't find a steady state. And I think that the potential for these tariffs to create long-term effects on the economy are such that you can't say the market's panicking for nothing. There's a real reason markets are reacting the way they are. And until we get some sense of what steady state looks like, this looks more like a markdown of equities

than panic selling to me. I'm wondering from all the markets that you've seen and the way you study them, whether you look at a market downturn differently when you have something as unprecedented, I think, as you've had now, where you've had, as I've said, a self-inflicted crisis from the White House, from the very hand of the president himself, which has caused it caused this level of market upset versus something over a period of time that just crops up and becomes an issue that

the market gets concerned about. The unwind of the Kerry trade back in August, for example. Yeah, that felt pretty bad. And the market looked bad for a bit. Do you judge the two differently? No, I think I think COVID was unprecedented. We'd never seen anything like that. The collapse of Lee, it's not that it's unprecedented,

but that it has the potential to change the global economy long term. I think that's what sets us apart from COVID, is this could change both the size of the global economic pie and who gets which slice, which is one reason I think it's tougher to call this than another crisis. You don't know how this whole process is going to play out. Because I wouldn't be so quick to judge the market and say, hey, the market is overreacting.

There is real change coming, and the market is trying to price in that real change. But that's a great unknown. I mean, if they believe that they're trying to reset the global economy, and let's just take that at face value, and we say, okay, I buy that, you're going to have higher costs here in the U.S. to produce goods, you're going to have higher wages paid to the workers to produce those goods. You may not have the pricing power you once did. So therefore your margins are never going to be what they once were. Thus your earnings are going to be reset lower.

Thus the market multiple, I would assume, must have to be corrected lower, too. And you know what? The White House may be okay with that, because from what I've heard in the last five to seven, it looks like the end game for the White House is not so much what equity markets will do, but what the slice of the pie is that the rest, I mean let's face it for 40 years, the slice of the overall pie that equity investors got got larger and larger and it created consequences and I think in many ways I'm not sure the White House cares that much about the market slice of the pie if some other

group that they feel is you know waited a long time gets a slice of the pie that's larger than it used to be. So that's what makes it feel different. Usually in a crisis, the secretary of the treasury is out there trying to calm markets down and essentially soothe fears. This seems to be the exact opposite. So I'm not sure what the end game here is. And it's clearly keeping the equity market going up doesn't seem to be on the top five list of things that the White House is concerned about right now.

And if you're a player in the market, that is a problem for you because you're no longer on the top of the list as somebody they care about. I get it. But what is the slice of that pie? Making a widget for a low wage in a factory that's suddenly brought back to United States? That's the real end game is how much smaller will the pie get because the global pie will get smaller if you make global trade more difficult.

The global economic pie will get smaller and the US as the largest player in that market will also see a smaller pie. A less robust economy in terms of who'll get which slice, I think I'm not sure that anybody's going to get a slice bigger than the slice today at the end of the process. But the White House seems to believe otherwise. Have you, aside from being such an astute market watcher

and a thinker about all of this, you're an owner of stocks and you own some of the mag-7. I mean, are you looking at this and even with the uncertainty that I hear in your own voice and what I know is in your own mind like the rest of us, are you buying stocks now? I'm holding, which is as good as buying right now because I'm not leaving the stocks I have. I have limit buys and companies have always wanted that, you know, I have a list of companies, great companies that look expensive to me. Now some of them are coming well within the zone of being buys. So I am willing to buy.

But at the moment I look at the Mag 7 or the Mag 5, the five and a quarter that I end up with and I look at the Mag 5 that I own and I think that, you know, I heard the previous speaker about them being adaptable and flexible and I agree with them. I think if this creates a kind of environment, you got to move quickly, you need a lot of cash and you need the capital to keep going, they're in a better position than pretty much anybody else

in the market to do it. And if you produce things you can't see the intangibles. Apple has to make smartphones, you can see them. But if you look at Facebook and Google and Microsoft, I think they're less affected by these barriers because what you can't see is easier to trace to a geography. Let me ask you lastly, again, we take it at face value. We say, okay, Apple's gonna move all of this production to the United States, but they're

gonna build their iPhones not with people, but with robots. You may have some people around the periphery of the factory where it's getting done, but the majority of the work's gonna be done by a robot, but you would have had to bring all that here and find the right kind of workers, the ones who are trained to do all that, et cetera. How would you think about its stock price in a new world environment of that? Where robots make stuff?

Then the pie, the argument about the pie changes entirely. The pie might go back to being a big slice going to the technology companies that provide the robots. So, you know, I'm not sure that's the end game the White House should be talking about if their end game is workers are going to get a bit higher wages. But that's long term. That's not happening next year or two years from now.

That might be way down, you know, five, 10 years from now. But I think if that is the end game, it's going to take a while to play out. And I'm not sure it's going to be cheaper than what they're doing right now. So we'll see. Nobody knows what the end game truly is. I think that's part of the market's issue here is the clarity, certainly the opacity that exists into what the strategy and the end game truly is. Professor, thank you as always. Appreciate your time. Thank you. That's about the motor and NYU Stern. Up next, some big moves in the clean energy space today. Enphase and First Solar are sinking. We drill down on that after this

break. Pippa Stevens takes a look now at some of the big moves today in clean energy. Hi Pippa. Hey Scott, well clean energy stocks are building on recent losses with Trump's tariffs set to have a big impact on the industry. Domestic manufacturing is growing, but the U.S. still imported more than 70% of our panels last year. And of those imports, more than 90% came from Cambodia, Malaysia, Thailand, Vietnam, and India,

according to Wood McKenzie, all of which have been hit with higher tariffs. As Brett White from Pine Gate Renewables told me, quote, the increases in costs will affect almost every single component of large energy projects. One name that could benefit, quote, the increases in costs will affect almost every single component of large energy projects. One name that could benefit, though, is first solar, given it's the largest domestic manufacturer. On the other side, coal stocks like Peabody and Core Natural Resources are jumping as President Trump is expected to sign an executive order in just a moment, designating coal as

a critical mineral and looking to boost output on federal lands, including to satisfy power demand from data centers. Now this comes as coal use has been declining for years and now makes up about 16 percent of power generation, down from more than 50 percent at the turn of the century. So it does remain to be seen, Scott, just how much of an impact this EO can really have. Pippa, thank you. Pippa Stevens, up next. We track the biggest movers into a close that is worsening as we speak. Christina Parts-Navarroes is standing by with that. You have to keep track quickly because these stocks are moving a lot. OK, so I'll speak really fast.

Wall Street analysts are shifting their preference from Robinhood to a more established competitor. I'll tell you who and why after this break. We're about 10 or so away from the closing bell. Let's get back to Christina Parts-Novellos for a look at the key stocks that you are watching. I just want to mention as, you know, we're at the lows now, seeing even more selling into the close.

We're in danger of closing Christina below 5,000 on the S&P for the first time in nearly a year, since April 19th of 2024. You tell us what you're seeing, but I'd imagine that the stocks that you looked at an hour ago were only looking for the most part worse. Sure, there's some green on the screen. What do you see?

I mean, not much, but what have you found? It's funny, this morning I was gonna pitch shows on just the volume within the SMh and the socks and really the sectors I looked at look at and that's completely reversed within the chip sector and you mentioned I guess some green I found one and that was carvana shares They're climbing as the online auto retailer really announced plans for a massive mega site in Chandler, Arizona 100 acre facility it's gonna be updated to combine auction capabilities with vehicle reconditioning and investors might actually step back from trading during this market volatility, which has not really been the case over the last few days. We know just last week that we've been reporting that there's been a lot of retail trading

action and volume, and that's why they downgraded Robinhood, upgraded Schwab, seeing Schwab as a safer bet with more reliable earnings. Schwab shares that were off the session highs, they were 2% higher to your point, Scott. Down 1%, Robinhood down about 6% in this market sell-off. OK, thank you, Christina. Appreciate that very much. We'll stay on this market move here into the close. We're back after this.

All right, we're now in the Closing Bell Market Zone. CNBC Senior Markets commentator Mike Santoli is here to break down these crucial moments of the trading day. I said earlier, we had not closed below $5,000 on the S&P 500 in nearly a year since April 19th of 2024. We're below that now. We've been steadily weakening over the last couple of hours, really started during halftime

when this headline of, yep, these tariffs 104% on China, midnight tonight, and we haven't had any real signs to counter that of some kind of negotiation or any belief whatsoever that that is not going to happen. And this is the market picture you're ending up with right there on your screen. Reality sets in and that residual hope that maybe there could be a way out in the short term or at least a deferral drains out of the market. We talked about this yesterday.

It's almost like in this environment, every day you come in and they hand you an option and they say, this is gonna be worth something if we get de-escalation by the end of the day and over time as the hours tick and we don't get it, it drains away in value and you sell something. Now, yesterday we finished in the S&P four and a half percent above the morning low. Today we're going to be five plus percent below the morning high. This is bear market type action whatever you want to call it not technically maybe a bear market we got to a 20% loss intraday and you have this failed effort to make use of massive washed out oversold conditions that set in yesterday.

Huge volumes, 1100 NYSE stocks made new 52-week lows, every metric you want to look at. Now the fact is the failure of this rally this morning in itself doesn't invalidate those things and doesn't really mean that they don't have consequence. The last time the S&P lost a 4% intraday rally and closed lower, March 25th of 2020, that was two days after the ultimate loan, after. So it doesn't mean that you have to take it out. Now, we're only a few weeks into this thing, really only four days into the heart of it.

So I do think you have to be open-minded about just whether we've priced in enough of the unsettled. You cannot make a fundamental case right now, or at least have firm fundamental convictions about what's gonna happen from here. What you can do is say, if you drop 15, 18% off a high in no time, and you're trying to find some kind of traction at an important level, which yesterday's low might be,

then for a trade or for a tactical entry or even for long-term money, maybe it makes sense. Yesterday's morning low in the S&P is 48.35. The overnight low in the futures, meaning yesterday before the open, was more like 4800 on the S&P. That's basically your peak in 2022, that's half of the bull market evaporated.

People think that matters. So we'll see if that if that does matter. Sometimes that overnight futures level, it beats like the telltale heart under the floorboards. You know, the market sort of knows it's there. Maybe we have to go and check it out and see if it really is going to scare us. We'll see whatever headlines come out. We're going to get earnings soon.

Obviously, the end of this week, we expect a lot of companies, think to pull guidance and you know that only adds to this degree of uncertainty to say okay you know what this is not good. It adds to the uncertainty or it confirms the uncertainty but it also acts as a way to test whether the market has already metabolized some of that. No way to really know it until we get there. There's still a way you can look back at yesterday and say, if nothing else, that maybe was the moment of maximum trade,

tariff hawkishness, we don't know, but it seems like maybe that was the case. You saw the effect this morning that these little gestures of negotiation and openness and maybe we can just be cutting deals had an effect. Maybe it was just an opportunistic fleeting trade, or maybe it was a sign of what could happen if we get a thaw.

And we just, you know, there's, confusion is gonna overtake conviction until we get some kind of proof that that's gonna be the way we go. I mean, we're still, you know, hanging on either up or down any headline. Yeah, it's nuts. Which is why some are saying it's just so hard to get even more negative from here.

You could easily make the case why you should. Yeah, sure. But any incremental positive regarding these tariffs and this trade war, especially with China, could turn the story so dramatically in such a short period of time that it only accentuates this paralysis from investors, from consumers, from business, et cetera. Everyone is aware of very acute short-term two-way risk. And that's, I think, what you're describing here.

I think you said it better than I did. No, no, but that's always the way it is. I mean, look, we haven't priced in anything like a worst case scenario on a fundamental basis. We're getting a recession. You know, there's this time element here where we just don't know how long we can go with this level of tariffs or this level of complete fog about the outlook and not really do damage to the real economy.

And that's going to undercut earnings. And we're still at 18 plus times those earnings estimates. So it's not like we've completely cleaned out all hope. So I think that's why it's tricky to know, yes, tactically we oughta rally here. If things really deescalate quickly, maybe we've done enough, but that's an if. You raise a good thing.

This stock market versus the real economy. And there are some within the administration raise a good thing, this stock market versus the real economy. And you know, there are some within the administration who have said publicly that they're different things. You can easily make the case that the stock market is now the real economy or certainly closer to it and it has a much more direct impact on that than it ever has in its existence. Well there's no doubt, both because of the public's exposure to it, but I think more substantially right now, because what's really bothering the stock market is that there's

a stagflationary shock coming to the real economy. That's the thing that it's worried about, and it's worried about the fact that treasury yields are up in a really tough equity market, and maybe it's because there's stressed capital flows, people selling safe stuff that they can that has a real-world economy effect too. I think that's why it's a fallacy and I don't think the right way to look at it. Well, only a certain number of Americans have stocks. No, it doesn't play out that way anymore. And we might find out the hard way into overtime with John.