Closing Bell - Closing Bell 5/20/25

Episode Date: May 20, 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 Mike Santoli in today for Scott Wapner. Well, on the seventh day, stocks rested. A six-day win streak for the S&P 500 is on track to end at this point. So far, it is more of a modest dip than a sharp pullback. You see the S&P 500 down to about three-quarters of 1%. Most of that downside happening in the last half hour. The scorecard, here it is with 60 minutes to go in regulation.

The big cap index is pretty much all lower as markets digest a powerful six-week rally running into this week. The small cap rose from 2000, a rare bit of outperformance today. It actually was in the green until just a little while ago. It's a little bit of a turnabout. Treasury yields, they are mostly steady, hovering just below Monday's highs, which were also multi-month highs, as bond traders focus on the federal budget-making process

in the absence of major macro releases today. The biggest upside contributor to the NASDAQ and the S&P 500, yeah, it still is Tesla, even with the stock up just about three quarters of 1%, it was up 2% to 3% earlier. It is sitting at about a three-month high as well. That takes us to our talk of the tape. Tesla CEO Elon Musk going on the record with our own David Faber talking everything from Doge to driverless cars. We have full team coverage standing by with reaction.

Tesla analyst Dan Ives is here at Post9. We're also joined by Tesla shareholder Brent Talkington. But let's first start with Phil LeBeau. On more of what Elon Musk said, Phil, what struck you most? A little more detail regarding what's going to be happening when it comes to the RoboTaxi network and then eventually the rollout that leads ultimately to the CyberCab. But remember, CyberCab, that doesn't really start until production next year, and we're a ways off from seeing that become reality. But with regard to the RoboTaxi network, Elon Musk confirmed that there will be the launch of that network in Austin next month in a geofenced service area, and it's not going to be right out of the gate, here's a gazillion self-driving Teslas

out on the road. They're going to start small. Here's Musk talking with David Faber. I think it's prudent for us to start with a small number, confirm that things are going well, and then scale it up proportionate to how well we see it's doing. Right, and what's gonna be a judge of how well it's doing? Are there any incidents? Are there any interventions?

And, but we want to be, we want to deliberately take a slow. That's Elon Musk talking about the rollout of the robo taxi network and how things will go from there. He did also say that by the end of next year they expect to have hundreds of thousands of Teslas with full self-driving, autonomous full self-driving technology. In other words, a human would not need to be in the vehicle, actually driving the vehicle. Keep in mind, what he's talking about are Teslas with that capability is his vision by the end of next year.

That's not how many they expect to have in the Tesla robotaxi network, but just the number that have been built, have that software, have that capability. That is what he's expecting by the end of next year. In terms of the robotacti networks, he says they expect to expand to other cities, specifically San Francisco, Los Angeles, San Antonio, and then roll out from there. And at times, there were some questions where they were talking about the battle between Tesla and Chinese competitors who have been brutally competitive and taking a lot of market share from Tesla in China.

Here's what Elon Musk had to say about that market and about the Chinese competition. We do have to battle other car companies in China who are trying to stop us from deploying it. It's incredibly competitive market, isn't it? China is the most competitive market. And to the extent BYD, which is neck and neck with you, I think, in the EV race, I think it's fair to say, worldwide, correct?

I don't really follow that. And if you believe that, come on. Elon Musk is watching the competition, Mike. There's no way he can sit there and say, I don't really watch the others in the competition. I think Elon Musk watches them. Does that mean that it drives his every move? No, I don't think he does that. But just from the times I've interviewed him in the past and from covering the company,

he's watching the competition. He's trying to set the standard and in many ways over the years he has set the standard when it comes to electric vehicles. Now he's trying to ultimately set the standard when it comes to full self-driving autonomous technology. Yeah, Phil, he said, well, look, he's just trying to build the platonic ideal of a product, right? And then the rest takes care of itself.

I'm glad though, Phil, that you kind of clarified what he seemed to be talking about with the hundreds of thousands to a million self-driving Teslas by the end of next year on the road. So I don't even know how that compares to what's out there in terms of the capabilities right now. Cause I mean, there are vehicles that have the capacity to do that.

Maybe they're not subscribing to it. So I just don't know how that relates to what's currently on the road. Well, the question becomes how many of these vehicles, if they have this capability for full self-driving technology level four autonomous. In other words, you don't have to grab the steering wheel. You don't have to pay attention,

which is by the way, the requirement for all Teslas right now. If somebody tells you, I have a self-driving Tesla and I never have to pay attention, yeah, that's not happening. That's not the way it works right now. The reality is that he believes they can get to level four autonomous technology,

which means you could largely not have to pay attention while in the vehicle. If that capability is realized, there are hundreds of thousands of Teslas that have that software. Now, how many of those owners actually use it, actually pay for the service? That's a different question entirely. Yeah, absolutely.

All right, Phil, yeah, maybe some confusion of the fact that they've called it full self-driving from day one and now we're talking about different levels of autonomy and all the rest of it. And autopilot was in there for a while? Yeah, exactly, exactly. So semantics, I guess. Appreciate it. Phil LeBeau. Let's bring in Wed Bush's Dan Ives, NCNBC contributor, Requisite Capital's Bryn Talkington,

as well Bryn, a Tesla shareholder. Dan, actually the entire market has kind of softened up and backed off. Tesla has gone negative. Don't wanna make too much out of what's driving what, but it almost as if the index held in place just in case there was something that was a blockbuster in terms of fresh news from Musk.

Were there any notes that were struck that were incrementally new or something that investors would take away? Look, in my opinion, the fact that Musk sits down for the interview, I mean, in terms of with favor, go back to a month ago, this is a different Musk than we saw over the last one, three months.

I mean, dedicated, focused on Tesla, driving in the next initiative. Look, I just continue to believe this is a doubling down in terms of autonomous, robotaxi, June, Austin. I view it as a watershed moment for Tesla. And he's not backing away. So I think it's important in terms of, you look at the future, we believe it's a trillion dollar

of market cap that ultimately is related to what I've used autonomous and robotics and I think you feel more bullish after hearing Musk. Brin he did say Musk did say that the only thing that matters is autonomous and optimist which is the humanoid robot business which is interesting because at some level it says I don't really care about this year's earnings as much or maybe next year's earnings. And the stock is at 50% from basically when they reported a ugly first quarter.

So clearly the market is looking ahead to something or attempting to. What did you glean off of all those remarks? Well, take Dan's one trillion and add another trillion on top of that, because Jensen won first of all, just related to Optimus has said the market for robots will be a Jensen says multi trillion. We know that and everyone talks about when is FSD supervised or unsupervised going to

come out where you can just do it yourself. Right now, once again, if you look down while you're driving, it's going to ping you that it's going to shut it off. And so definitely they are being safety first. These are weapons on the road. And I think Elon was crystal clear that they need to start slowly. But I think with innovation, companies like this, when he says things start slowly, then happen all at once. If it weren't for Elon, I think celebrities would still be driving around in those Prius cars. And I think what's important going forward is that this is a stock that investors

have continued to buy the dip. I don't think he's remotely ignoring earnings in the short term. I just think he is very focused on executing, on making robotics, on FSD, on self-driving, all of those different verticals come to fruition. And I think the biggest difference, you know, if you look at Nikola Tesla and Thomas Edison,

they're both geniuses. One died bankrupt and the other died very wealthy because Thomas Edison had the manufacturing prowess. And to me, one of the biggest stories that continues to me, I think undersold, is the manufacturing prowess of this company. Talking about the Chinese, Tesla's one of the few companies in the world that could operate autonomously in China.

I'm quite sure they were copying and watching how he was manufacturing to be able to catch up. But to me, what I take away is this continues to be one of the most innovative founder CEOs and one of the most innovative companies. I guess, Dan, if you want to take the trillions of dollars in robotics revenue or value or whatever it's going to be down the road, at some version of face value, the higher the stock goes, the more you have to believe to buy it today, it's happening sooner than we thought

before, right? I mean, there's just no other way around it. You know, cars have been around for a hundred years, everyone kind of needs one and you're just replacing the other one to buy a Tesla. I just feel like what's the ramp in terms of adoption, or does it even matter? Does much just have to kind of dangle it out there

and the market grabs it? No, I think it's important first off that in terms of adoption, or does it even matter? Does Musk just have to kind of dangle it out there and the market grabs it? No, I think it's important, first off, that in terms of China, you actually start to see a rebound. I think Musk recognized that in terms of Europe. We talked about that brand damage that I believe Musk no longer Trump administration. It's now important to actually build back some of that growth.

I think that's the first step. And that's why I think the stocks had a huge move, because leaders lead, he's back to being CEO of Tesla. I continue to be Musk is Tesla, Tesla is Musk. But ultimately it starts off, and Brin's talked about it, pieces. Austin, one piece. Rolling it out further to other cities, another piece.

Showing in terms of interventions, getting to level four and Phil hit on it, that's another piece. Hey look, it's my view. I mean, when you look out as they're successful, I mean, 90% of the value, future value, will be ultimately autonomous and robotics. But it all starts in June.

Yeah. Bryn, you said, look, buy dips. I mean, we had a big dip. Obviously it had run through the fourth quarter. It kind of got cut in half again. Where does it sit right now relative to your, you know, sense of whether, you know, people are discounting the future properly or not?

I do think that 400 seems to be a bit of a ceiling, 380 to 400. And so one of the, one of the things that I've talked about a bunch is selling calls on part of the position because of the huge volatility, and that's where you can collect a tremendous amount of call premium from coming in and selling really options

that go out one in two months. But it does feel like 380 to 400 is a ceiling until you get, once again, to your point, Mike, earnings do matter. They matter to us, they matter to us, they matter to investors, they matter to him, but so I think three to four hundred sell calls up into that level on part of the position

and then buy the dip when you get the opportunity. Yeah, I mean look, just to put numbers on it, I mean, a little over a year ago, 20-25 earnings were supposed to be four bucks. They're now at two. 20-26 earnings were supposed to be 450, they're now at at two. 2026 earnings were supposed to be 450. They're now at three. So again, you're kind of like you got away.

Maybe that explains why this stock is kind of, massively broad range, has been kind of sideways for a few years. Well, on to that, I think look, now it's sort of good time. I mean, you forget about Dark Chapter with Musk and Doge. That's done. Any of the brand damage, and we've talked about some of that is now contained.

Now it's about ultimately, it's not just building that chapter, it's stabilization of margins. It's an accelerate, it's when's the next model coming out. And then you start to actually build, what I've used is some of the parts, but you now have the mojo back at Tesla after what was obviously a dark few months for shareholders.

Brian, he also said elsewhere today, Musk did, that he plans to stay, what, at least five years as CEO. I don't know if that was a new agreement or he's just sort of putting that out there. I mean, is five years enough to satisfy investors today, saying this is a trillion dollar market cap based on many years in the future of growth. At the same time, Tesla is kind of changing its bylaws so that you can't sue them for

a breach of fiduciary duty unless you own a huge pile. Now I think you should think about his stay at Tesla as like dog years. He does in one year what most people have to do in seven. So I think five years is a tremendous amount of time for him to continue to accomplish. And also, it also gets under-reported. I get Tesla's Elon and Elon's Tesla, but the people that work underneath him

are absolutely brilliant. And so he continues to hire some of the best talent at XAI, Glen Shotwell at SpaceX, all the folks at Tesla, Shanghai in Berlin and Austin. And definitely he is the name of the company, but his ability to continue to hire the best programmers, engineers, I think is also part of the secret sauce

to the company mid and longer term. And the scale is unmatched. Yeah, yeah, well, certainly hope those layers have been filled in underneath him. We'll see how it goes. Dan, Bryn, thank you very much. Appreciate you breaking it down with me here today. If you missed any of David Faber's exclusive sit down

with Elon Musk, you can watch the full interview again tonight at 7 p.m. Eastern, right here on CNBC. Let's send it over to Christina Partson-Evalos now for a look at the biggest names moving into the close. Hey, Christina. Hi, Mike. Well, let's start with Moderna because those shares are higher, about almost 6% higher right now

after the FDA announced stricter guidelines around COVID vaccine boosters, which. Well, let's start with Moderna because those shares are higher, about almost 6% higher right now after the FDA announced stricter guidelines around COVID vaccine boosters, which sounds bad, but it's not as strict as many investors had feared. So clinical trials are now going to be required for companies looking to get COVID shots approved for healthy adults and children. But the existing process, you know, showing the vaccine creates a strong antibody response is still in place for adults 65 and older as well as high risk individuals. And quantum computing company D-Wave surging. Look at that 25% after releasing its latest quantum computing system called Advantage 2, which is accessible through D-Wave's cloud service.

It's the latest announcement, of course, in the red hot quantum computing space where Google and Microsoft have been active in the last year. And you know how volatile these names are, Mike. Yes, absolutely. They trade a tremendous amount of their outstanding shares every day. So keep that in mind. All right. We are just getting started.

Up next, KKR's Henry McVeigh tells us how he's navigating the market amid all of the tariff uncertainty and everything else going on. He joins me at Post 9 after this break. We are just about at session lows, S&P down 0.7 and 1%. We're live from the New York Stock Exchange. You're watching Closing Bell on CNBC. Welcome back to closing bell losses accelerating a little

bit as we head toward the close with markets set to break their six day wind streak. Joining me at Post9 with how investors should be positioning right now is KKR's balance sheet CIO Henry McVeigh. Henry, great to see you. Great.

Nice to meet you. You're always kind of traveling the world. You span asset classes and regions and types of investors. I want your assessment of kind of what this market's been contending with in the last couple of months, meaning we had this crescendo of sell the dollar, sell bonds, sell equities, and all kind of built to a climax. We're rebounded a lot from there, and some of those things have gotten better, and some of them have kind of been sticky.

What is that about, and are we stuck in it still? Okay. Well, I think we're into the grind phase of this recovery. So let's go through the positives. One is oil's a lot lower. That affects the consumer's wallets and pocketbooks right away.

Two is rates are actually lower since President Trump came into office. And when we look at our models, a slightly lower dollar actually helps. The offset and then the final thing is there's no net supply. I mean, everything that you've been talking about, the very few IPOs, most of their debt financings that we see are refinancing. So typically when you have a real problem, there's a glut of some poor security in the

market. That's not the case right now. The negatives, I would say, are things to keep your eye on. Number one is you can't fix a current account deficit without fixing the fiscal deficit first and so that has created the consternation in the market that you've talked about. The second thing and we put this in a piece today is we shouldn't forget one of America's crown jewels is its services industry. Actually we would estimate the profitability of the $300 billion services industry is actually greater than the current account deficit,

the trillion on goods. I think that maybe gets missed. The services trade surplus. Yeah, that surplus is a huge number. And when you look at the jobs number that rolls off every month, we really have a great economy in the services economy. So as we're fixing the goods deficit,

we need to make sure that we don't knock and the services economy. So as we're fixing the goods deficit, we need to make sure that we don't knock down the services economy. Why would the kind of services trade surplus, the really strong position that our financial and technology media companies have globally, why would it be at risk if we're trying to fix the goods? Well, I think this gets to what I hear, you know, I travel all over the world

and you report on this, which is, you definitely have some consternation from global allocators. Let's go through their April, which is the dollar went down, treasuries went up, and equities went down. And then their liabilities, which are local liabilities in Canada and Japan and Europe, went up faster than what they thought. And that kind of hit some risk alarms. So we need to make sure that we can also not only export goods but we can export services particularly around IP and then I think we're a great economy in terms of capital formation

and that bleeds into financial services and so as I you know talk to different CIs globally they're trying to find diversifiers and that's really what we we wrote about today they want to find things that are non correlated to the to the market and that's that's been a pretty significant opportunity for what we do at KKR but it's definitely has people whether institutional investors or individual investors rethinking that traditional asset allocation. The markets have celebrated this kind of back peddling on maximum tariffs and have obviously come down to some level and there's a pause on most of them.

What's your kind of current thinking in terms of where it settles out? What does it mean for growth? What does it mean for global trade and capital flows? So I think there are a couple of things to keep in mind. One is we view the tariffs probably going to have a baseline of about 10 percent. I think that's part of President Trump's agenda. And then he'll use the reciprocals to negotiate. We have not been in the recession camp for the reasons I cited.

Lower oil prices are a huge tailwind. Lower rates, which is a big focus of Scott Besson, and then ultimately a modestly weaker dollar, that's a pretty good tailwind. So we have GDP about 1 to 2%. And we have earnings actually, our models, the same model that was pointing straight down in 2007 it's actually saying that growth is going to be kind of four to five percent on earnings so I take some comfort in that.

Four to five percent for this year? Over the next 12 months. The other thing I would say is look we've stepped down a little bit from forecasts I mean numbers were beat in the first quarter we had really good growth last year the one of the great things about doing macro and asset allocation at KKR with our CIO, the balance sheet, is we have 200 portfolio companies and our companies are actually doing pretty well. I think we did a lot of preparation

coming into liberation day, but generally companies are hanging in there. You mentioned that professional investors everywhere, retail investors, looking for proper diversifiers. Bonds don't seem like they're serving that role at this point. You mentioned the fiscal deficit. You obviously have, you know, yields have been stickier to the upside than we might

have expected. Where does that lead you? Look, in equities, it takes you to Japan, it takes you to India. Those are two must-own markets. I think there's a, you've seen this in the equity prices in Europe, they're performing better. I also think that we've been doing a lot of things around infrastructure, real estate credit,

something we call asset-based finance, real tangible assets that you can own. And we actually own an insurance company that we investors can buy that generates cashflow that's non-correlated to the market. So we're trying to think outside the box and we are arguing this time is different. And with that, we've been working with our investors

to form capital around things that we think will navigate some of the choppiness that you've been reporting on. Does that seem to imply US equities have more to give back in terms of relative performance to the rest of the world? I think there's gonna be a bifurcation between equities and fixed income. On the equity side, India, Japan, and Europe combined, the US market is twice that size. So big money's got to be here because this is where the growth is, it's also where the liquidity is. On the

credit side, we're largely around the role of shock absorbers or the government bonds. We're seeing investors really wanna talk to us about how they could maybe own a little more cash, but then diversify that portfolio to get some upfront yield, but to think differently about owning a big bond portfolio. When you look around simply, the consumer's not ever levered, the corporate's not ever levered,

and a lot of the leverage is in the government system, not just in the US, but it's really a hangover from COVID, and we see it all around the world. We're starting Japan overnight, right? With its yields flew out and they talked about their fiscal situation as well. Henry, great to catch up with you, thanks so much. Thank you for having me.

All right, up next, Google holding its annual Developer Conference out in Mountain View, California. We'll take you there live with fresh comments from Google's head of search after this break. Closing bell, we, be right back. Welcome back to Closing Bell. Alphabet holding its annual developer conference, Google I.O. over the next two days. The company sharing the latest on the future of search and its AI strategy. Our own Deirdre Bosa sat down with Google's head of search just moments ago.

Deirdre? Hey, it's my guest. So Al alphabet chairs, let's talk about that first. They're down about one and a half percent after the keynote. There were impressive demos, more in agents and personal context. Android XR for smart glasses. That's extended reality that blends the real and digital worlds.

But the lackluster response from the market suggests that there was no killer app or narrative laid down. And investors, they still need to digest what it all means for Google in the AI race, and especially as it pivots from search to AI or tries to have it all. So I did just sit down with Google's head of search, Liz Reed, and I asked her if they're trying to do too much.

There's AI Overviews on the home page. There's now AI Mode as a tab. There's Gemini as a separate AI app. And she said that by offering all of these choices, they're discovering how ads evolve in AI. I think we're going to be still early in understanding how to do ads within AI mode. But what we saw with AI overviews

is there continues to be space on the main search page for a range of different ads. They can be the text ads that you think of traditionally. They're also the product ads. We have hotel ads. Just they're really ads that are adapted for what is the user need at the moment. By the way, Mike, there were a lot of good number of live demos during the keynote and that really raises the stakes for the next big tech event. That's Apple's WWDC in June. They've moved away from live demos.

Google really leaned in in this keynote, and that has really been key for consumer trust in this AI era. Back to you. D, stay with us. We're also gonna bring in CNBC contributor and big technology founder, Alex Kantrowitz, also at the Google event.

Alex, I guess your big takeaway in terms of what Google needs to achieve in terms of what Google needs to achieve in terms of persuading consumers and investors that they can actually thrive in this world without giving up too much of their dominant search business. Well, look, I think the main message that they needed to convey today was that they're

in reinvention mode. I think that we crushed Google a couple of years ago for being slow in the generative AI race. Now they've come all the way back. This event today was all about generative AI from every single angle and every product. And if you're going to stay competitive in tech, you need to reinvent yourself over and over again. And I think the market is going to make Google pay basically a penalty for reinventing itself for a little bit.

But think about the alternative. If you're Microsoft and you don't reinvent yourself and go over to the cloud, you got Windows and you're in the desktop operating market. If you're Google early on and you're not reinventing yourself into a mobile operating system and a browser, you're a website. So this is the natural progression

for every big tech company that wants to stay competitive. And I think the thing that was reassuring to me today was we saw Google say, okay, generative AI is the thing. We're going to go all in. Now, are there going to be some speed bumps along the way from here to there? Absolutely. Is the market going to punish the company in spades like they are today? They're not taking the stocks, but the stock is down today on a day where Google's made many impressive announcements. That's going to happen.

But ultimately, I think people shouldn't forget about the big picture here, which is that it's a reinvention moment for Google, and the company is not being shy and, in fact, putting its foot on the gas pedal. I guess that's certainly true, Alex, but it's funny how in a vacuum, everything that Google is demonstrating today,

and the progress they've made, the investments they've made, the products they've produced, maybe would really pass muster as being as good or almost as good or better than what's out there in terms of AI competitors. But the problem is they have the best business ever created at their core. And so it's hard to make it seem like anything but playing defense and a net negative, I imagine.

Well, look, this is what's going to happen, right? So we are going to see the entire tech industry make this move. This is going to be a major opportunity. We've seen all the tech giants increase based off of this, maybe outside of Apple. So the high margin search business, it's definitely going to take a hit, even though right now we've seen chat GPT grow and Google's been crushing. So how big of a hit is still yet to be determined. If you're a fan of what Google's doing, you believe that the opportunity is bigger over time. Because if you think about it,

if generative AI fizzles right now, then all those competitors and the competitive threat is gone. But if generative AI keeps growing at the pace and the extent to which it is, then you're looking at a much stronger Google because it has the resources, it has the researchers, it has the products that it's going to build this technology into, and importantly, we think about the margin, right? It's very cheap to serve a Google search compared to a generative AI search.

Everything's becoming more efficient. So ultimately, that's a very positive picture for the company if this works. And again, what's the risk to the downside if it doesn't? I don't think it's much. Yeah, and Dee, I guess, you know, there has been some comfort taken, I think, among people maybe within Alphabet

or investors in the stock to say, you know, in terms of the revenue producing types of search or web activity in general, Google will still have an edge there. If you're looking for a particular business or a link, that's different than the, you know, Ask Chat GPT and encyclopedia question about the past. Right. I mean, Google's been masterful at this. They've been so dominant in that search business.

And I agree with Alex in that really the theme is reinvention. But where I might differ with him is, are they moving fast enough? Are they being bold enough? I mean, I touched on it when I talked about AI overviews, AI mode, Gemini app. I mean, they have all of the technology, the full stack to succeed here. But are they embracing the narrative as quickly as they need to, versus a perplexity or a chat GPT that are thinking about ad models in a totally AI native way? Can Google shift that quickly when it has this big innovators dilemma, this legacy business

that has been so profitable sort of hanging over? And that's what I think investors are trying to sort through. Can it transition that for an AI first world? And I still think about those comments from Eddie Q just a few weeks ago, with the kind of suggested the window is closing, they're being disrupted. There's more urgency than ever for Google to figure this out and embrace its reinvention

versus being dragged into it, right? The difference between playing offense and defense. And I guess, Alex, is there one way that Google could answer those criticisms, that it's either being kind of grudging about it or trying too many different things or trying to do these half measures to preserve their current advantage? I mean, is there kind of like, you know, make the best product, not, you know, subscription-based, but free? Other places are trying to get people to pay up. I think it's quality.

Honestly, it's quality. And if you think about what's happened with Google's competitors, you have OpenAI. We've promised GPT-5, their latest model forever. It's not here. We have Claude, or Anthropic, the latest version of Claude, the biggest version of Claude. Opus, still not out yet.

Meta's, big llamaama, Beemit model, is having trouble not released. Google's shipping. And are they at the top? Yeah, they're at the top of the leaderboards right now. Is there a meaningful difference between using Gemini and ChatGPT? Maybe not big enough,

but remember, Google has the resources, they have talent, and they have the product surfaces to push out a state-of-the-art model. So I think it's really incumbent upon Google. This is not going to be easy. Even though I'm bullish on what they're going to do, I do not think this is going to be easy. It is incumbent upon them not only to maintain and stay with the pack, but to lead the pack. And from everything they told us today, they have the ability to do so. But as we've seen in every single one

of these developer events over the past couple years, you can tell a great story. It really matters what you do in the real world. And that's what's, I mean, Google gave the presentation, and now the hard part begins. Yeah, no, it is fascinating, even just in the last couple of days, the things you're hearing about other players doing,

you know, Apple opening up its AI to other developers, obviously Microsoft hosting there. It seems as if people have to kind of partner up and have some kind of distribution solution even if you've kind of built a decent mousetrap. We'll see how it all goes. Thanks very much guys for going through all that with us and giving us the color Alex and Dee.

Still to come, what to watch when Toll Brothers reports results in overtime. Closing bells, we'll be right back. about 14 minutes till the closing bell. The index is up off their lows. The S and P off about half a percent. Let's get back to Christina for a look at the key stocks to watch Christina. Let's look at Airbnb shares because they're falling after Spain ordered Airbnb to remove 65,000 rental listings from its platform just yesterday. Spain claims that the listings in question either did not have license numbers, had a license number that did not correspond or did not disclose whether the owner was a professional or private individual.

Airbnb says they will appeal all decisions related to the case according to the New York Times shares down a little bit over 3%. Shares of Warby Parker popping right now, up 16% after Google announced a Smart Glasses $150 million partnership. The series of glasses will be built on Google's operating system specifically for headset computers and can essentially provide directions, translations, and message summaries without ever having to reach for your phone. Another distraction, Mike.

Yeah, I guess the dream persists of Google Glasses one sort or another. Christina, thank you. Up next, what to watch when Toll Brothers reports results in overtime. That and much more when we take you inside the Market zone. We are getting some news out of the CNBC CEO Council Summit. Sarah Eisen is there. She joins us now with more. Hi, Sarah.

Hi, Mike. Good to see you. Just wanted to share some of the conversation with Dan Quayle, 44th Vice President of the United States, because he does not speak very often, never does interviews or onstage. So it was a rare treat to get to hear from him on all things foreign policy, of course.

That was front and center in his 40 trips, diplomatic trips as vice president under President George H.W. Bush. He's now the chairman of Cerberus. Besides foreign policy, of course we talked about tariffs. Here's what he said. I don't think there's a strategy, it's so top down. But it's either the madman theory

or it's gross incompetence. Or maybe somewhere in between. But take your choice. If it's the madman theory, then he wants everybody to say, you know, Trump is crazy and therefore you better deal with him. And I think that's what people say, hey, you know, we can't control this guy. You know, you better come to the table, give us agreement.

Or is it the complete opposite that this is just, you know, putting tariffs on everyone except Russia. Did you notice that? Russia was exempt from the terrorists for whatever reason. I mean, we terrified... We don't do much trade with them. So he was critical on the terrorist strategy,

but also critical overall on the approach toward Russia and skeptical that President Trump will be able to end the war in Ukraine. And despite the criticism, Mike, he did confirm that he voted and still supports President Trump. Voted for him three times, in fact. I think that was the first time on the record. But it was just interesting to get his view as a so-called Reagan Republican on how different

the party is right now under President Trump. Yeah, I was going to say, reflecting a bit of a generational and philosophical difference within the Republican Party to a degree. Sarah, great stuff. Thank you so much for bringing that to us. We are now in the closing bell market zone. Diana Olec looks ahead to Cole Brothers earnings out in overtime today.

Plus, Brendan Gomez on what has Amer Sports pacing for its best day ever. And Target, TJX, and Lowe's, they headline a busy Wednesday for retail earnings Fimo senior retail analyst Simeon Siegel shares his outlook Diana first. What can we expect from toll? Well, Mike toll brothers Which is of course a luxury homebuilder is expected to report a drop in q2 earnings as well as pressure on margins Some of that due to higher mortgage rates the rate on the 30-year fixed

Began climbing in April and stayed in a higher range, not to mention all that stock market volatility weighing on higher-end buyers, some of whom might depend on stock gains to make down payments. Now the question is can toll counter these headwinds with lower prices or rate buy downs? In tolls Q1 earnings, CEO Doug Yearley said they were already seeing mixed results in the spring season with affordability constraints and growing inventories in certain markets pressuring sales, especially at the lower end. And others have said it's consumer confidence or a lack thereof in the broader economy that

has buyers hitting pause. Taylor Morrison, CEO, recently said they were not seeing the normal surge in demand between March and April. Toll had been an outlier in last year as other builders struggled because higher end buyers weren't on the edge of affordability. We will see if that holds in Q2. We will, Diana, thank you. Brandon, pretty dramatic move in armor

and really at the end of a huge year for this stock. Yeah, Mike, look, shares looking to close at an all time high, results beating on the top and bottom line as well. Today, the big question going into earnings, though, was China and tariffs. Now, the company raising guidance, dimming any concerns there. Q2 adjusted EPS raised 2025.

Revenue growth now expected between 15% and 17%. The company notes guidance assumes U.S. tariffs on imports from China remain at 30% and 10% on all others. But even if after the 90-day pause, tariffs go back to 145%, Amer only anticipates a 5-cent impact for full year 2025 EPS after mitigation. CEO James Zhang saying the company's pricing power will allow them to, quote, manage through any tariffs. Now AmerSport's CFO added that between price increases,

sharing tariff impact with vendors and supply chain maneuvers, the company is well positioned to absorb those costs. Something different than what we've been hearing from other retailers perhaps this quarter, Mike. Yes, in general, that is the case. Brandon, thank you very much. And Simian, let's pick up right there. I mean, obviously that's sort of sporting good brands.

It's not a brick and mortar retailer so much. And maybe some unique properties there. But what do you intend to hear from the companies we're gonna hear from soon? Not mid to high teens revenue growth. Yeah, right. So there are some companies that are doing it. But I think going back to Diana's point

about consumer confidence, I think we have to acknowledge consumer confidence and consumer spending are not the same thing at all. This is gonna be a good quarter. We're seeing it. It's generally a good quarter. The question was never Q1. The question was guidance. The question was tariffs. The question was uncertainty. And now right now the last couple weeks feel a lot better than they did before that from Liberation Day. And so I think right now a lot of companies thought they were going to be telling us

nothing and now all of a sudden they're able to talk a little bit better. They're going to be able to talk better even though this is still this kind of limbo period when we still don't have a final answer. So the beauty of better is it's a relative term. And so better is better than nothing. Like companies where with most companies the default was going to be withdraw guidance. Why talk about the full year? Now there's actually some things to talk about.

And so I think right now you may not get away. Like it may actually be a tougher scenario because you might not get the excuse of talking about nothing. And so now you have to operate within the framework we have with tariffs. But I think what it does is it forces companies to not get sucked into the macro

and actually talk about who's a good operator. Like again, Amer just put up an excellent result. Birkenstock, similar mid-tie teams. Yesterday Bath and Body Works told us that they're changing the management, but they actually are seeing growth for the first time in a while. And so I think we're gonna see businesses

be able to talk with obviously some level of caution, but talk about a Q1 that was better and maybe a little bit more visibility. Among some of the companies, and we're gonna hear I said from TJX tomorrow, for example, and then, you know, Target, Broadline. Within that weak consumer confidence, but still steady

consumer spending, who's doing better or worse? So the fascinating thing is you and I always love to talk about stocks versus companies. TJX, excellent company. It's expensive. It's expensive for a reason. And so that's a conversation you and I have had forever. I think right now you're gonna watch, listen, in a tough environment, TJ wins no matter what. In a good environment, do they just keep compounding and taking that share? So again, looking for a better than feared type of a quarter right now,

and they're gonna be on the other side of the spectrum of is good scenario, is better macro good or bad for them? Longer term, this company, I think they compound. I think they keep taking share. I think some of the others, like you're also gonna get a VF, which we didn't talk about, which was viewed as more of the dirty or the problematic ones.

And there's a lot of them across the mall. And so I think what's gonna be interesting is now that retail is actually catching a bit. Some of these companies, these stocks, are at their highs. Some of them are up here today. I mean, that's wild. And so that's this dynamic of investors looking at stocks versus companies. With regard to VF or that subcategory, is there anything to be made today about the Levi's

agreement to sell dockers to authentic brands? I mean, whether it's about where apparel is right now or the rise and fall of, you know, a once dominant brand or the rise of Jamie. No, I think like you're watching this authentic brand empire grab more and more, but I think there's two pieces there. I think what you're seeing is Levi's say, what should I have? Like there's this Dick's Footlocker, Capri Tapestry, Levi's spinning off. You're watching a lot of M&A in different directions,

some work, some don't. And there's this question of is it better to empire build and be very large? Is it better to focus on what makes you great? I think it always is better to focus on what makes you great if you can make that bigger than go for that. Yeah. And so I think it's going to be case by case company specific. Levi's right now is telling

you here's where we want to focus our story. The Nike move, obviously massive relief on China, the backing off of Max tariffs, but where does that leave it? So the beauty of Nike is Nike's stock came down a lot, its valuation did not. And so you watch this where the numbers people people effectively built in a lot of fear because no matter where the tariffs are in whatever region, Nike produces there. I think Elliott still has to earn those stripes. Elliott still has to earn everyone's credit.

Once he gets that credibility, there's an army of people that want to buy into Nike. But the idea of let me give you credit, whether it's Nike, Starbucks, whatever the turn is, the permission, the leash for a turn has gotten shorter. Simeon, thanks very much. Great to see you. Good to catch up. By the way, I wanna mention, there's gonna be more Elon Musk coming up

at the top of the hour at 4 p.m. with David Faber, another part of that live interview. Meantime, as we head into the close, we had a little bit of a wobble in the indexes just after 2 p.m. Some of that's been picked back up. We are still on pace for a down day and the big cap index is gonna end

a six day win streak for the S&P 500. That index is down about 4 tenths of 1%. The Dow down just about a quarter of 1%. Pretty modest losses coming out to the broad market. Had had a gain of about 23% from those August 7th lows. The bond market has managed to calm down and no longer alarming stocks. 4.48 on the 10-year.

That is below the danger zone, above 4.5%. And that is going to do it for Cozy Bell today. We're going to send it to overtime with John Coy.