Closing Bell - Closing Bell: 5/2/25

Episode Date: May 2, 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.

Alright guys, thanks so much. Welcome to Closing Bell. On this Friday, I'm Scott Wabner live from Post9 here at the New York Stock Exchange. This make or break out begins with a rally back in stocks, which is being extended today on that better than expected jobs report in hopes of a breakthrough in the trade war with China. We'll ask our experts what it all means in just a bit, including the Wharton School's Jeremy Siegel is back with us today.

In the meantime we'll show you where things stand with 60 to go in regulation. The S&P tracking for its ninth straight day of gains. That's the longest streak since oh four pretty broad base to which points to

the strength that we are continuing to see most of the mega caps. They are higher after reporting earnings this week with the exception of that one at the bottom of your screen. It is Apple right in this tariff storm will follow that movement into the close we will also ask the star analyst eric woodring of morgan stanley for his big takeaway this week in that name it does take us to our talk of the tape the big rebound for the stock market

how far it might be able to go trade headlines matter matter a lot, of course, and we did get more midday. Let's go to Washington where our Megan Casella is standing by with the very latest. Hi, Megan. Hey, Scott. Everybody is hungry for any signs of progress on the trade front. And the Wall Street Journal is reporting now that there could be something of a breakthrough when it comes to China. So the Journal reported around midday, around noon today, that a top Chinese security official

has been looking into what exactly the Trump administration wants to see when it comes to fentanyl. Remember, of the 145 percent tariffs that Trump has imposed against China so far this term, 20 percent of those are about fentanyl specifically. So the journal emphasizes that discussions are fluid here, but that they're considering sending the security official either to Washington for meetings or to some third country to have meetings with the Trump administration. Now, I should note here that I've reached out to the White House.

We have not heard from them about whether they've heard from China on this front or whether this sort of move would be enough for them to adjust their tariffs at all. But this does come just after China's commerce ministry said that they've been evaluating some of the US's offers to launch trade talks and they said yesterday that they want to see some signs of sincerity from the US as well in the form of canceling some of these tariffs. So the key with this journal report here Scott is that it could be the type of move that allows both sides to sort of call a win. The U.S., President Trump could say that he got a win if China makes some big move on fentanyl and that

could theoretically lead him to at least reduce the fentanyl tariffs which could allow China to say we're only talking to you now because some of these tariffs are off the table. So much more to come on that but potentially some signs of movement Scott. All right good reporting. Megan thank you. That's Megan Casella down in Washington as you see. Let's now bring in the Wharton Professor of Finance, Jeremy Siegel, also Wisdom Trees Chief Economist. Welcome back.

It's good to see you as always. Good to see you, Scott. Are we back? We out of the woods? Well, first let me say that what we've said over the last two months, I think confirms two of the oldest sayings in Wall Street. And one is, of course, don't try to time the market and

Two there is a lot of value to diversifying your portfolio The S&P is still down in the US Year-to-date Europe Europe is up 15 to 20 percent emerging markets is up virtually the same We're finally seeing that diversification pays, trying to time the market as a fool's errand. That being said there's no question that traders expect a big pullback from the paraposition that you know Trump now maintains that a lot of these, many of these, most of these are going to be taken off before that July 2nd deadline of resumption

of the reciprocal tariffs. You surprised at the magnitude of this rebound that we've seen. I said we're going for nine days in a row, but we haven't done this since 2004. Right, yeah, no, I said we're going for nine days in a row, when we haven't done this since 2004. Right, yeah, no, I am surprised. I think one thing that people don't realize is there's a huge tailwind, I mean, we know about

the headwinds of the terrorists, there's a huge tailwind of the 10, 12% decline in the dollar for the multinationals, in terms of bringing profits back from Europe or elsewhere in the world, they're going to be enhanced. So some of the tariff problems are going to be offset by the fall, and not all of them. And let's be honest. American public has not yet felt the tariffs. They've heard about the tariffs, you know, they're plastered on all the news, but for a lot of people they say, oh, rising

prices, you know, I'll believe it when I see it. And they haven't seen it yet. So, you know, in many ways there's a lot of talk about the bad effects of the tariff, but at this particular point, American public, even though the polls are not great on that issue, they don't yet reflect the full impact that they will see if Trump stays on the current course. You think this, you know, US exceptionalism trade, which got so talked about over the

last month or so with the activity we saw not only in the bond market, but because you do mention the dollar, do you think that was greatly exaggerated, that too much was made of that, that this is still the place where capital from around the world is going to flow? We have the best, we have the deepest market in the world. We have the brightest and most transcendent companies in the world. And this is where those monies want to be. Absolutely.

You know, absolutely. Listen, despite what maybe Trump will say, I mean, Trump is only going to be president for three and a half years. The exceptionalism, the deepest capital markets, the place where innovation, where you can market, you know, we have a pride in innovating, bringing things to market, destroying the social order, so to speak, you know, disruptive technology, that's all in the United States, that you know surpasses any president that we're gonna have remember stocks are longest are our longest term

assets and really three and a half years you know people say oh you know it's gonna be bad for three and a half years when you take a look at you know how long this the the earning stream of stocks go three and a half years is really a very small part of the present value there. So, you know, whatever you think about, whether Trump is going to do good or Trump is going to go bad, the exceptionalism of the U.S. economy surpasses that by far. It's unbelievably resilient. I think more so than many have even wondered in their wildest imaginations from COVID on the other side of that until now and and maybe the worst is is yet to come with the tariffs. We don't

know but this economy has had a resiliency that I don't think many people expected and as long as the labor market professor hangs in like it appears to be doing we don't have to talk about recession every conversation, do we? No, no we don't have to talk about recession every conversation that we have. However, you know it is still my prediction, unless he backs off on these and you know and we get a lot of relief before that July, recession is still a possibility. And you know I think I don't think we could rule it off but I think that president is beginning you know if you notice he has

softened the tone since the April sell-off we don't get quite as many wild you know up and down accusations one way or the other. I think part of it is his advisors. I think part of it is some discipline from the polls, to be honest. And I still think he listens to the polls, and people are very cautious. They're very skeptical that, you know, the mainstream media, of course, is just blaring, oh, rising prices, you're all, everyone's going to be poor. People are waiting to see, and he has to listen to what those people are saying.

I know there are some who are listening to this saying, you guys are too giddy. You still got the tariffs, you still have an undeniably slowing economy, all of the employment numbers, the reads, they're all lagging. The worst is yet to come because business is still in a fog. Now, earnings, I think you'd admit, were probably better than you maybe thought they'd be. And many would be in that same boat.

You are actually getting guidance to a degree from some, and maybe more so than you expected as well, and that's helped sentiment too. Yeah, well, I mean, I really like what General Motors did. They actually, you know, sat down, you know, studied the tariffs that they're under and actually said if, you know, if they, if under those tariffs they're going to take a four and a half billion dollar profit hit.

I think a lot of CEOs really punted their call, oh, we don't know what's gonna happen so we're gonna yank guidance. I mean I think it's incumbent on management of all these companies to sit down with likely scenarios and tell us what they think was gonna happen and I think you know Trump and his crew has to hear that also. So you know I give credit to General Mo's They really did their homework. I wish some of the other firms did because otherwise, you know, certainly what earnings are gonna be in 2025 are a big question mark right now.

Now there's no question. I mean, there is a level of, as I said, fog that's become increasingly more difficult to see through. Some CEOs are willing to kind of go there, get out the fog lights and make their best guess, but we shall see to your point. Let's bring into the conversation Professor New Edge Wealth CIO, Cameron Dawson, and she's here with me at Post Nights. Nice to have you today. What are your thoughts based on what the professor had to say and the myths of this nine-day winning streak? Well, we have been calling this time, this space between. The idea is that we're likely past the peak tariff headline uncertainty,

but we still have not started to see the real impact on real economic data from these tariffs. We're starting to get certain hints now with things like the trucking data, look at what's going on with West Coast port volumes. And the question is, how long can we be in this fog of uncertainty before it starts weighing on economic data? We don't think it will see it in labor data until we get well into the late part of the second quarter early third quarter Which just means that we're stuck in this purgatory where we continue to have markets whipsawed around simply by tariff headlines and very importantly Positioning can we say yet and we probably can, but I'd like your perspective on this,

that earnings are not gonna fall apart to the degree that some most feared. Well, we're still with earnings estimates that have been marked down since liberation day by about $5 for 2025 and $5 for 2026. Interestingly, still within those earnings estimates, you have record operating margins forecasted, which just means that this market does not yet believe that companies will not be able to pass on price increases to customers

or that companies will be very successful in blocking and tackling around these tariffs. So we would put earnings still in the camp of being still fairly optimistic because of those record operating margin forecasts but we don't have this cataclysmic earning scenario because we do know that American companies, mostly large cap companies, are extraordinarily good at operating in uncertain environments.

It does mean, though, professor, if you even get more of a slowdown or even in the current and present time, that valuations with a nine day rally back, we've gotten so much back from the depths of the low that the market's just too expensive.

That's what I heard earlier this week. If you take the week in total, that's what I heard earlier this week from Rick Reader of BlackRock who while optimistic over the longer period is like, look, the economy's slowing, earnings

growth is definitely slowing, and stocks are now just too rich. We need a pullback to reset even more a bit. Yeah, and by the way analysts are not macro economists. They look at the firms. There used to be S&P used to put out a macro forecast of earnings and about 10-15 years ago for whatever reason they pulled it to do just firm analysts and and so they're going to be the last ones. They're just keeping it the same until they actually see

an effect on sales and yeah, listen, take a look at, again with General Motors said, take a look at Kirby said, of United Airlines, you know if there's a recession, I think he said one third of our earnings are going on. So if there's a recession, you're going to pull down earnings an awful lot, much more certainly than what we have now and then you know stocks are rich under those circumstances by the way I mentioned Europe Europe even with a 20% year-to-date in dollars still selling 15 16 times earnings by US is 20 21 22

sometimes times earnings that have not been brought down yet. That's a good point. We haven't talked. It's funny. We haven't talked about, you know, international markets versus the U.S. in a while. It's funny what a rally like this will do for you. What about the professor's point? Better value over there. I think it's a really good point that even with the innovation in the U.S., we should

go back to the period between 2000 and 2007. During that time, you had a 40% decline in the dollar, and the NASDAQ underperformed emerging markets by over 50%. There was still an extraordinary amount of innovation going on within the US, but a high starting valuation can pose a challenge for markets. And so if you go to the beginning of this year, Europe is trading at 13 times. The NASDAQ was trading in the high 20s, had a lot further room to fall, whereas Europe simply just had more room to rerate

even slightly to get better out performance. Well, what did we learn from the mega caps since you mentioned that in the NASDAQ, which is up one and a half percent, it's had a really good week up three and a third percent. All of the mega caps other than Nvidia have now reported. Did you learn enough to say, you know what, that's the trade you want to be in again?

Well, we learned that they're very good at generating returns even in a low return environment. And we think that that's where mega caps do best. Meaning that if we are in a low growth world, they have the ability to turn a little bit of growth into a lot of profit. Where we're not as positive on the mega caps is if you go into a recessionary type environment,

these are still cyclical businesses. Look at Apple being a seller of consumer durables. You have advertising businesses within Meta and Google. So if you go into a weaker economic environment, we don't think that these are necessarily defensive names, but boy are they good at blocking and tackling in a low growth world. What about that, Professor?

Did we come out the other side here now and feel better about tech than we did at the beginning of the week? Oh, yeah, you know most most certainly I mean these these these are great companies and they have come down Certainly even you know relative to to the long-term earnings But I think this is the first time in a long time Scott that we could say hey Diversification really pays and those people that were only in the Mag-7, wow. They take a ride that maybe they will think again. Especially for all of you that want a really stable, long-term

portfolio, you see the value of spreading your assets. The Fed is another big question. And we are going to get there next week of course. Couldn't be a better time to hear from Chair Powell and company. CNBC Senior Economics reporter Steve Leesman joins the conversation right now. It's good to have you. So you got a jobs report that was much better than expected. So Chair Powell saw a shadow today.

It means we have six more weeks of no rate cuts. That's the takeaway. That's a good way to put it, Scott. I wouldn't say that's the right way to do it. I don't think they were going to do anything next week anyway. What would have happened, I think, if you'd had a weaker report, it would have raised the pressure on them that I think they would have resisted next week. But to look at what the outlook is, Scott, and what the markets did with this number

was they pushed everything ahead. There's still believers in a rate cut coming in the summer instead of June. It's now July for the first cut instead of July. It's now September for the second and they're banking on a third cut in December. That may be wishful thinking. But Scott, I just want to throw one thing out there, which is I get that the market has been up and I don't have much of an opinion on the market. I would take Professor Siegel's worst idea better than my best idea any day.

But I just think you've got to be careful to talk about what I would call immaculate taxation. No matter how we get out of all this, it looks like there's still going to be a 10% across the board import tariff on this economy, which would be, again, one of the largest tax increases in decades. And I just think it's early days to say we've escaped the macroeconomic effects of this. I don't know about the stock market effects of this, but I think that when I look at these numbers today, Scott, for example, when I see that we have 29,000 growth in transportation and warehousing, I'm pretty sure that's not going to be a source of strength next month.

Leisure and hospitality up 24,000, pretty sure that's a job category that would be at risk here. Manufacturing was negative, retail was negative, federal government was negative, and one of the places where there was strength was in healthcare of 51,000. I'm not sure that's going to be a strength. Now, there may be other areas that will be strengths. I just want to show you one thing I did here. I wonder if I could get a grade from the professor on this one here.

Where I compared what happens to transportation and warehousing employment with the Dow Jones transports. What it looks like is they pretty much run together. And what it says to me is you're going to have a fall off, at least in that category, because of what's happened with the 20% decline so far from the highs of the DJT, Scott. Grade him on a curve, Professor. What does he get? Definitely Steve knows his history. You know when Dow Jones did its theory back in 1897 he had the rail average and he used that to predict the industrial average and it became

one of the most famous stock market indicators that we have i i do agree those are advanced warnings and i also agree with steve the benefit if we think the best the base case is a ten percent across the board with maybe twenty percent on china really still way outweighs whatever tax cut uh... you know trump is trying to push through congress

uh... and i can't see how that won't have a negative effect on the economy. It may, and we would have to see if that happened. But Steve, let's just say that that is the outcome, that we have a 10 percent tariff that just stays in place. At least that gives CEOs some level of visibility where they can run their businesses, knowing what the game is.

They can try and make the adjustments that they need to make. Those that have pricing power will do what they need to do. Those that don't will figure out other levers to pull to try and maximize the profits to the best of their abilities. But at least we'll know the rules of the road. And right now, we do not.

Sure. I mean, I think there's always been, this has been a double barreled problem here, which is the uncertainty followed by the fact that the policy is not perhaps optimal. And by the way, Scott, that would be a tripling the 10% of our existing average tariff rate. It would make us the most tariff developed country in the world. Look, that's where the market was already down three trillion, expecting something like that relative to when the president took office.

So look, that's not changed. I do think that your point, Scott, is an important one. I think Professor Siegel made this as well, which is the dynamism of the U.S. economy, the dollar being weaker instead of stronger, which is what should have happened with the tariffs. That helps as well. So we have those two things happening. The other thing that might be helpful for the economy here is in the wake of the pandemic, as you remember, it was very difficult for people to find workers. They had to pay up for them. Then they had to train them.

I think there'll be some attempt to hold on to them. That could help the U.S. economy as we work through these issues here. However, one place I'm particularly worried about, Scott, is small business. Doesn't show up on our radar every day. These people can't go in and ask the president for exemptions, and then they don't have the

cash or the credit to hold on while we work these things through. So that's one area of the economy I'm particularly worried about. A fair and a pressure point, no doubt. Cam, you get the last word. So we do think that these tariffs are going to be bad for corporate margins. The biggest question is will companies turn to layoffs in order to defend their margins that likely will take time, but that's how this turns into a small demand issue for consumers into a bigger economic issue that causes a recession.

All right. We'll leave it there. Good weekend, everybody. Professors, good to see you as always. Steve, always enjoy having you in our conversation. You as well, Cameron. We'll see you back here post 9 soon. To Christina Partsanevalos now for a look at the biggest names moving into this Friday

close. Christina. Scott, let's start with Duolingo. Hitting an all-time high today after the language learning app beat first quarter estimates and lifted its full year revenue. Driven partially by a 40% drop in paid subscribers, but the CEO really credits AI for rapid content creation. Developing 100 courses used to take them 12 years, now

they can do it in just one year. Shares up almost 19%. And GoDaddy sliding despite posting Q1 results that beat Wall Street estimates and guidance weighing on the stock right now. The domain registry company's revenue forecast came in below expectations. The company CEO told investors he's quote, focusing on what we can control while navigating macro uncertainty. You can see shares down 8% but we have more on those results. GoDaddy CEO will join in overtime for an exclusive interview at 430 p.m. Eastern. Scott. All right noted. Christina to you as well. Thank you Christina Partsenevalos. We're just getting started

here coming up. Bruised Apple today. Shares are falling. Not a lot of red on the board, but that certainly is one place to look. Down 4 percent. All the uncertainty around tariffs. What does it mean for where that stock goes from here? We'll ask the top Apple analyst, Eric Woodring. He is with us next from Morgan Stanley. We're live at the New York Stock Exchange and you're watching Closing Bell on CNBC. Dow good for 600. We're right back. We're back. Tariff uncertainty, one major factor weighing on Apple shares today.

The company saying it expects tariffs will add nine hundred million dollars to its current quarter costs while any impact beyond June is just too difficult to gauge. Morgan Stanley's top Apple analyst Eric Woodring joins us now. Welcome back. It's great to have you on the backside of these these earnings which better than feared. Is that your biggest takeaway this week? Thanks for having me Scott. So there's aspects of the report

that were definitely better than feared I think. Listen, March quarter revenue at the higher end of their range growing 5%. You know if you look back over the last 12 months, this is a business that has grown EPS at about 10, 11%. All of that is probably better than feared.

And I think some of the demand commentary, especially on the product side, related to a lack of pull forward, a lack of either demand pull forward or sell-in pull forward, that is better than feared. What we saw in the March quarter was true demand. And I think that was a bit of a positive surprise. Scott, I know you've referenced tariff uncertainty, obviously. That clearly plays a factor here. I think maybe the bigger factor with this report was maybe the lack of certainty on

the June quarter services guide. I think that's really what's weighing on the stock today. Apple has guided services effectively every quarter. We didn't get any incremental color last night. Obviously service is a key part of this business. I think that plays a role in the stock's move today, Tim. I mean, I feel for the community that you reside in, in which you have to try and model out what's gonna happen when Tim Cook himself says

he doesn't know, because he has no visibility past the current quarter. How do you operate in that environment? Listen, I have to give Apple credit. It's easier to write research in this environment than operate a $3 trillion manufacturing business. So we have the easy job, they have the tough job, right? And it's not necessarily unusual for Apple

not to give guidance or commentary beyond the current quarter. And so I don't necessarily think they owe us anything, whether it comes to September quarter or beyond guidance. But again, that's part of the challenge. The uncertainty here is where is tariff policy going? Where is China policy going? It becomes a bit of a binary outcome. And that's hard when you're trying to pick stocks, especially stocks like Apple, that have exposure to international manufacturing, have exposure to the consumer.

So we're talking about tariffs. Obviously, there's some binariness there. But what about the second order effect? Obviously, Steve and the group earlier before me were talking about the potential for growth slowdown and recession. This is a company that has effectively 100% exposure to the consumer. That then plays a role in how we need to think about the company. So there's a lot of variables that are at play right now that make it tougher to look

beyond the next three months with a lot of conviction. That's the tough part here. Part of the fallout, too, of all of this tariff stuff and the noise and the fog is that we already as an investor class are especially impatient about progress on AI. And if anything, this just pushes that back even further, which you have to believe put some sort of ceiling on what the stock can do until we get more clarity on that. Yeah, if you just listen to the questions that myself and my peers asked on the call last night, a lot of it was around demand pull forward and tariffs and how to mitigate

tariffs. If you rewind three months ago, the first questions were about AI. And so again, there's this dynamic that has introduced itself in tariffs that has kind of taken precedent because it's here and now and we have to respond to it and there's so much variability to it. Obviously, there were questions about Siri last night and I don't want to make it seem like those aren't important questions, they are. Now we do have the developer conference coming up in about a month, June 9th.

That will be an important kind of stopgap in learning where Apple's roadmap really is. But the question is, do we get clarity? Do we get a date, for example, that the new Siri is going to be introduced? Or is there some kind of trepidation in introducing a date simply because at least last night Tim did admit that they needed more time to kind of fix the problems and make the product better. Do we get a date? Again, there's another piece of uncertainty there that we are dealing with and obviously a critical one when you look at the rest of the Mag 7 and the role that they are playing in this AI story. Are you surprised,

the last question, that Apple didn't get any bump today on that Wall Street Journal story about at least some degree of progress with China, or getting the two sides to the table is one of the first places I looked when that headline hit for obvious reasons. Now, the stock was up eight straight days into the print too, which you could potentially point to and say,

well, that's another reason why the stock may be selling on the news today. But I was kind of surprised by that. What about you? Yeah, so I think the challenge is that, you know, talks of talks aren't necessarily tangible evidence of progress. And again, if you look at Apple,

there was a point over the last month where this was $170 stock when kind of the tariff narrative was at peak negativity. So you are well above that low. So the market has already priced in a fair degree of what I would call China optimism. So yes, talks of talks are important. But again, I kind of go back to earnings last night because that is so recent with this name. Again, I just think the services part of this business is so critical. It's over 40% of gross profit dollars. And for the first time in multiple

years, there is a question mark with exactly where this business will go in the June quarter. Now, it could be much to do about nothing. It could be a real risk. Again, the market heats uncertainty. That's what you're seeing in the stock today is uncertainty in services, in my opinion, weighing on it and outweighing some of this news related to China progress. It's critically important, obviously. I mean, I think the services business is like a Fortune 50 all by itself. So your point's well made. Yeah.

We'll see you soon. Eric, thank you. Eric Woodring, Morgan Stanley, joining us. Up next, waiting for Warren. We're less than a day away from Berkshire Hathaway's annual meeting where thousands of shareholders are flocking to Omaha to hear from the Oracle himself. We'll take you there live just after this break. Berkshire Hathaway share is hitting a record high again today ahead of the annual shareholder meeting tomorrow. Senior markets commentator Mike Santoli joins us live now in Omaha. It's good to see you. There are so many things that we wanna learn. We haven't heard from Mr. Buffett in a while.

There's the trade war and the tariffs. There's the transition, there's Apple, and there's this mountain of cash they're sitting on. What's top of mind for you, Mike? Well, I think how he characterizes that mountain of cash, he tries to downplay it as a market call. We'll see if that does continue. He says, look, the majority of investors' money

is in public equities. I'd be interested to hear how he contextualizes the trade war. He's on the record, of course, as believing that tariffs are not really an effective way of rebalancing global trade. Also, things about the federal budget and how that's being approached.

He always sort of boasts about Berkshire Hathaway being among the biggest creditors to the federal government, owning 5% of all T-bills, how much he buys in T-bills every Monday. That's a lot of that cash hoard. And he sort of almost is proprietary about thinking what the long-term budget, structural reforms might have to look like,

but I'm not sure that going through and eliminating agencies willy-nilly would be the way to do it and honestly how he believes this market is behaving it's really shocking to me in a way that Berkshire Hathaway is making a new high when risk appetites are again on the rise while it outperform massively during the correction so it sort of serves for investors both as offense and defense. It's fairly unique. This incredible man is 94. A lot of people obviously thinking about the transition.

And you point to what you think was a pivotal moment this morning on our network when Sue Decker was on. She's a director and said of that transition that it's gone from a plan to implementation. And you think that's notable the way that was characterized? I do. I mean, this is definitely a prolonged and very orderly process, but just the fact that she would essentially say, look, a lot of this stuff has been handed over to Greg Abel

in terms of a lot of the day to day, a lot of the capital allocation decisions she specifically cited. And I think that's one way of conveying to the tens of thousands of shareholders who are showing up here this weekend that there's not going to be some kind of sudden break in the post Warren Buffett world of Brooks or Hathaway. It's basically been built to persist as it is. And essentially while there might be changes to the portfolio or cash allocation or something like that, it's not going to be really a different culture or leadership from day one.

Alright, we hope you enjoy your time out there. We of course will see you tomorrow. We see Becky there with Warren Buffett today too, which is a tradition in itself. That's Mike Santoli again. He and Becky are going to be on tomorrow. We're going to bring you the entire Berkshire Hathaway annual shareholder meeting live right here on CNBC. We'll stream it on CNBC.com and CNBC Plus as well. It all gets going at 830 a.m. Eastern Time. Coming up top venture capitalist Rashaun Williams is back. He'll tell us how

he's sizing up the snapback in big tech now. Critical week of earnings now in the books. Tell us whether the IPO market is going to reopen in a big way anytime soon. We're back right after this. NASDAQ's rallying again one day after the index wiped out all of its losses since April 2nd. My next guest says he is cautiously optimistic

on that sector. Let's bring in the venture capitalist, Rashaun Williams. Welcome back, it's good to see you. Hey, thanks for having me. Good to be here. Let's talk about the tech trade at large, mega caps really. We took some x-rays this week.

Did the patient, did the AI trade get a clean bill of health in your mind? I'm so glad you mentioned it because you know I was gonna bring it up. We've been saying for the last few years that people have been investing in AI and we hope that it pays dividends and I think we're actually seeing it now. You're literally seeing all this robust AI investment bring us home on the earnings side and I mean just look at the Microsoft, the Metas, and the Apples of the world, they deliver. So I had a

positive experience in this past earnings season with the guys that have been over-investing in this space, but I think there are some concerns out there still with some of the other names and some of the other sectors. We had Robert Smith of Vista on a little more than a week ago, and he's all in on AI. And when I asked him the idea that he thinks we're in the very, very early innings of this belief,

he couldn't have been more emphatic that in fact he thinks we really are. Do you agree with that? Are we still super early in the cycle? Yeah, 100% I agree. First of all, anything Robert F. Smith says, you better take it to the bank and save it long term. He seems to know what he's doing and talking about.

Yeah, he's the gold in our industry. But I absolutely agree. If you take one step further than AI, everyone's going to be talking about quantum computing in five years, right? We're laying the infrastructure now. Once quantum gets into the mix, this AI world is going to take a whole other level. But I do think we're probably in the third inning working our way to the fourth right now. Oh interesting. How do you feel

about the markets. If this been an unbelievable bounce back right. Nine straight days where we're probably going to clock that today because we're well on our way to doing that S&P as I ask you this question is up one and a half percent.

Is it too much. Does it have staying power. What are your thoughts in general. You know I'm a little biased. We have a lot of pent up supply that we're waiting to hit, you know, the public markets with all of the financial sponsors on the private equity and adventure side, having all of this built up supply. Look, at the end of the day, I'm cautiously optimistic. A year ago when we had this conversation, I said I was done with the IPO market.

I said secondaries are the new IPOs. In fact, since then, 71% of liquidity events in my space have been in the secondary market. M&A is a distant second. IPO is non-existent. But guess what's happened between last year and today? In some way, we're increasing in confidence in this marketplace. Look at VIX. VIX has decreased significantly. And as you know, once we get below 20 in VIX,

we're going to start seeing more IPOs happen. I think 80% of IPOs happen when we're sub 20 in VIX, right? And we were a lot higher, you know, six to 12 months ago. After VIX comes down, you're going to start seeing multiple expansion, which we've been talking about a lot. A lot of these companies are waiting for these multiples to expand. And you can start to see the S1 registration start to trickle in kind of one by one. So you have a ton of supply. And you even have I hate to even

say I know it's a bad word on the show. Spacks are actually coming back to take advantage of the built in supply. I had to say you did. I had to say hey hey they're coming back. I'm not asking them to. They're just coming back. All right. We'll talk to you soon. Be well. All right. Thank you very much. All right. That's what Sean Williams joining us once again. Still ahead on the chopping block. Block shares are cratering today after disappointing guidance. We break it all down for you next. We're now in the closing bell market zone CNBC senior markets commentator Mike Santoli is here to break down these crucial moments of this trading day.

Plus Mackenzie Segalos on blocks big drop and Julia Borsten on more record highs for Netflix Mackenzie we begin with you Block's big drop and Julia Borsten on more record highs for Netflix. Mackenzie, we begin with you. What's going on with Block? The Block shares are down more than 20% on pace for their worst day since March 2020 after a brutal earnings miss and a wave of downgrades focused on Cash App. So the company fell short of estimates on revenue, gross profit and payment volume. Meanwhile, Cash App GPV has now been negative

for multiple consecutive quarters with monthly active stuck at 57 million. Wells Fargo, BMO, Seaport and Benchmark all downgraded the stock overnight with Benchmark warning that stagnation in active users is even more concerning than reduced spending. Now Block says its turnaround hinges on lending with FDIC approval now letting Cash App Borrow

go nationwide and double its eligible user base. But while Cash App regroups, Venmo just reported a 20% revenue jump as it leans further into checkout. So two very different approaches, both chasing the same goal of owning the consumer's digital wallet. Scott.

All right, Mackenzie, thank you. Mackenzie Segalis. Julia, Netflix, nothing can stop it. Nothing can stop it. Netflix is trading at an all-time high. It's on pace for its 11th straight positive session. It's now nearly 30% this year, and it's in the top 10 of the best S&P stocks in 2025. JPM added Netflix to its focus list yesterday saying, quote, advertising up-fronts in May should serve as a positive catalyst to shares. And separately, JPM's retail radar tracker had it as the seventh most popular stock among retail trailers in the last week in what was a record month for retail buying at $40 billion.

Now, Netflix shares are up 20% since the company reported better than expected earnings on April 17th. Analysts and investors increasingly are seeing Netflix as well positioned to weather any pullback in consumer spending as subscribers have seemed to be absorbing price increases with no problem and as ad business offers a new opportunity for growth. Back over to you. All right, Julia. Thank you, Julia Borstin.

Mike Santoli, I feel like the word of the week is relief. Relief, the mega caps in total, pretty good. The jobs report, better than people feared and maybe even some relief on the trade war front with these China and US headlines. Yeah, for sure. If you think about the main downside drivers into that extraordinary 20% drop in seven weeks, and especially the cascade lower after April 2nd, you did have essentially this idea

that recession risk had ramped, and maybe we were going to have some kind of a sudden stop in global trade. Maximum tariff regression, that was April 7th or 8th, right? That's where the market made its low. It's been relaxed ever since, at least expectations. And then even the AI theme, the AI spending theme

really took on some water going into that period, people assuming it couldn't continue. So yes, we got reassurance along all those fronts. It leaves intact this idea that what we really had was a bit of a frontloading of panic about the macro implications of what's going on with tariffs. Now, does it mean we're out of the woods? Does it mean you should chase a market that's up nine days in a row, that's recaptured,

you know, 55, 60 percent of all that was lost? That's a tactical question that gets a little trickier in my view from here, but good economic news is absolutely worth embracing in this market after it had taken on that much of a hit. Got 90 seconds and we'll go back to the event that's taking place tomorrow. Of course the Berkshire meeting Apple shares they had been selling down their position in a big way. They still have some so we may get an update to on where they firmly stand on where that

stock might go from here. Yes we may get that in part of the quarterly results that Berkshire is going to report first thing tomorrow morning. Yeah, I mean, Berkshire still owns 2 percent of Apple or so at last report. Did sell it down a lot, I think largely because it got too big as part of the portfolio. It's still more than 20 percent of the public equity portfolio that Berkshire holds. So I don't think it was an abandonment of that story, but yes, it'd be interesting to hear,

to whatever degree, Warren Buffett is willing to weigh in on what's behind that, whether in fact he's concerned about the trade flow implications as it bears on Apple's business or any of the rest of it. So, you know, he hasn't tried to make too much of a lot of the public stock investing stuff that he does that much in recent years, but he will be asked about it, I'm sure.

Yeah, what a high that they enter this meeting on. The stock in an all-time high, the cash files like at an all-time high. Mike, can't wait to see you tomorrow again on CNBC, CNBC.com, CNBC Pro, 8.30 a.m. The Berkshire Hathaway annual shareholder meeting from Omaha with Mike and Becky Quick. It's just for us. We're going green in a pretty big way. Nine days in a row for the S&P. The Berkshire Hathaway annual shareholder meeting from Omaha with Mike and Becky Quick.

It's just for us. We're going green in a pretty big way. Nine days in a row for the S&P. I'll see you on the other side of what I hope you have. It's a great weekend with Morgan and John in O2.