Closing Bell - Closing Bell: 5/5/25

Episode Date: May 5, 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, Scott Wobbner live from Post9 right here at the New York Stock Exchange. This make or break hour begins with a winning streak for stock, nine days and counting, a little bit in jeopardy as we do begin this final stretch. Here's where things stand with 60 to go in regulation. We're fairly muted today, more down sectors than up. We are coming off the worst levels of the day by far though. Investors continue to weigh the impact of the trade war following the bulk of mega cap

earnings last week Microsoft and Metta and Alphabet you see there they're all green today Apple though not so much it remains in the red down by almost two and a half percent 200 bucks even that's what we'll call it we'll track it over this

last stretch interest rates they're ticking up today too that could be keeping a little bit of a lid on the market as well. A very big story today is crude oil sinking to its lowest level of the year on OPEC's plan to increase production. There it

is. Fifty seven dollars. It's been right around that level for the day and we'll follow that too. It does take us to our talk of the tape. The rebound and where things are heading from here. A lot obviously depends on trade deals. And on that note, we start out in Beverly Hills today with our own Sarah Eisen, who

interviewed the Treasury Secretary earlier and made some headlines. Hi, Sarah. Hi, Scott. Good to see you. Treasury Secretary Scott Besson is here at the Milken Conference with all the heavyweights in global finance and the bank chiefs to deliver a message reinforcing growth and investment in President Trump's economic agenda and also Scott trying to redirect the conversation so it's not just all about trade but it's also about the tax deal which he's knee deep in negotiations with Congress

and is trying to pass by July 4th and deregulation. Of course I asked him for an update on trade and he sounded pretty constructive about where things stand. Listen. I can say that I am highly confident that we have 18 important trading partners. We'll put China to the side. The 17 other partners, many of them have approached us with the very good trade proposals. President Trump is going to be involved in all of those. He will be the final decision maker. That was in response to a question I asked him about uncertainty. And he was saying, I'm not uncertain because I have knowledge that things are going well.

So I said share it please with us on the trade front. Now as for China, he's also sort of tasked with negotiations on this one. Again, he repeated that the current situation is unsustainable, the effective trade embargo between the US and China and he said we could see de-escalation within weeks. Didn't really go into exactly how that's going to happen or whether China's presented that as a plan, but again, I thought it felt overall that we were moving into a positive direction

when he coupled that with the growth benefits of what he's looking at in terms of the tax deal and really getting deregulation going and seeing the fruits of it in the second half. Scott? Yes. He said he had asymmetric knowledge, which he should. He's the Treasury Secretary. One would think that he should. He really underscored their three stage approach, as you just said, and really the idea that the U.S. is still, Sarah, the preeminent place for foreign investment, which has been questioned over the last many weeks given some of the movements in the markets.

It has, no doubt. And obviously the Treasury Secretary rejected that. Jane Frazier, the CEO of Citigroup, also speaking with her earlier on CNBC, also rejected that notion. She said, I'm not one of those that is questioning Brand USA. This is the place where it's at, the US dollar, US treasuries, US stocks. And I am hearing a lot of that right now. Even earlier, Mark Rowan of Apollo, who was saying that some of that came into question,

said the US is still exceptional. It just is going from hyper exceptional to exceptional. But that is part of the messaging here from the Treasury Secretary. And that is he's trying to implement from the Treasury Secretary, and that is, he's trying to implement a strong growth environment because he also wants to cut the deficit, and he put out a deficit target of GDP to 3.5%, which is aggressive, aggressive enough to please the market,

but to do it in a systematic way every year, so it's not a growth shock, but what he needs to do to get there is to have economic growth. So he's talking about it and trying to lay out exactly how that's going to happen and trying to redirect the conversation all around that. Yeah, Rowan mentioning the brand damage,

those were the words he used. Ken Griffin, of course, using similar. And you'll catch up with him in a couple of days and I'm glad we caught up with you. Sarah, thanks so much for the interview and the time on our program. Thank you, Wednesday. All right. That's Sarah Eisen out at Milken. Dan Greenhouse of Solace is here with us at Post 9. All right.

So you heard from the Treasury Secretary today. The market's going for 10 in a row. We might just get it too. I mean, we're well off of where we were earlier today. We're already back 17.5% on the S&P from the lows. Where are we going? Listen, now that we're back where we are, I think, and as viewers probably know, I've been somewhat optimistic, very optimistic relative to the consensus. But now that we are back where I thought we should have been, which is around Liberation Day levels, we can reassess the environment. And I think from here, it's a little more complicated. You do have tariffs coming down the pike.

You had the president obviously tweeting about tariffs on things like Hollywood movies that are produced overseas, et cetera, et cetera. So that story is not over with. I just don't think it's going to be as bad as a lot of people anticipated. Plus you've got the 200-day, on a more technical basis, you've got the 200-day moving average about a percent and a half above where we are. And I think there's going to be a lot of hesitancy among those of us that look at those sorts of levels until you consistently or confidently break through We're far from where we were obviously not just from a market standpoint, but feels like from a sentiment

Standpoint to I want you to listen to what Brad Gerstner of altimeter told me earlier on halftime He too joining us from Milken today about the level of risk that he is willing to take right now from Milken today about the level of risk that he is willing to take right now. At certain times there are these macro events that mean you have to reduce or increase your units of risk. So think of it as a volume knob and in 23 and 24 I had nine units of risk on so our volume was turned way up. At the start of this year we turned that down to one unit of risk, one out of 10. And today we're back up to about six or seven on that volume knob. That's a pretty interesting perspective.

Beginning of the year, all the way down, turn the volume all the way down because it's too noisy. And now six or seven. That sounds like a pretty decent environment that we are in now. Yeah, he's talking about leverage. And I think for those of us on the asset management side of things, that's how you're supposed to think about the world. You can take more risk when you flop aces, so to speak, and when you flop a two-seven offsuit,

then maybe you want to dial it down a little bit. And I think to Brad's point, right about now, I think it's fair to say you're more comfortable with the environment. You know that the president isn't as draconian as perhaps the original headlines suggested to some people. Obviously, you're not going back to zero. Everyone agrees that there's probably a 10% across the board baseline. But you know it's not going to be as bad as you thought. Plus, in conjunction with that, you've got Q1 earnings season,

which went really, really well. Basically, double expectations on the EPS side of things and corporate commentary was not phenomenal, but was quite good. It was far from phenomenal. It was far from phenomenal. Let's be honest it just wasn't nearly as as bad as people came in thinking it would be. I'll disagree but. But you'll disagree. I'll disagree. I mean listen again you just had MasterCard. I've said this a hundred times that the I think the card companies are the premier conference calls you want to listen to and follow. MasterCard just reported and basically said the same thing that Visa Capital One American Express said,

which is sure there's some under the headline behavioral changes, maybe a little bit more of this, a little bit less of that, but they've seen no real change in consumer behavior right now. And I think you have some of the best reporting names, GE, Vernova, Honeywell had an excellent report, Train Technologies, Vernova, Honeywell had an excellent report, Train Technologies, Pentair, a host of industrial companies

had pretty good things to say. We talked about tariffs being manageable, the environment being stable, outlook being positive. Obviously, that can be thrown, a wrench can be thrown in the works in one or two months, let's say. But I disagree, I think the first quarter was solid. Okay, solid's better than, I mean, you- I've stopped myself from saying phenomenal, I disagree. I think the first quarter was solid. Okay, solid's better than, I mean, you-

I've stopped myself from saying phenomenal. Okay, good, good. I mean, you self-corrected, I didn't even have to do it. There still is a lot of uncertainty. And to that end, Adam Parker suggests that they are way more negative now than they were just two weeks ago. Why? Because as he says, and I quote,

"'There's no doubt in our minds that conditions are meaningfully worse and more uncertain now than they were at the beginning of the year. You don't think that's true? Well, things are certainly, the environment is more uncertain today than the beginning of the year.

I absolutely concede that point. And that's why, while I had spent many weeks on this set with a number of other people taking the more optimistic view of things. You did. Now that we're back to 56 whatever, 56, 71 as of this moment, I think you have to temper your enthusiasm a little bit and say,

okay, well what is the catalyst to take me, not just above the 200 day moving average, which is an important level, but back up towards the highs or even beyond and I think With that level of uncertainty right now that idea that you would go back to the highs at least in the short term here Is probably challenged. Well, don't you think that as the markets recovered and the multiple has grown higher? Once again in a lower growth environment That's a bit of an issue earnings weren't fabulous, they weren't horrific,

but they're still slowing. Sure, but I also don't think, the focus on valuations right now, I think is totally misguided. And by right now, I mean two years. This is not a valuation driven market. First of all, you have the discrepancy or the divergence between the valuation that we place

on the Mag-7 type stocks and video Broadcom in general. Tech is the largest weighting with comm services. Obviously, you're talking about a humongous percentage portion of the S&P 500. That's going to just mathematically pull up the index valuation, but deservedly so in many cases. They're growing at a more rapid pace. But I would also add that a lot of what's going on in markets right now is about money flows.

It's about allocation. It's not really about valuation. The market is compelling. I need to get involved. It's cheap. The margin of safety, et cetera. I don't think that's the issue right now. I think it is more about flows than anything else.

You worry about in any way the so-called American exceptionalism trade, which has been highly debated over the last month. Treasury Secretary Besson obviously defending it. Why wouldn't he? That's part of his job is to defend this great country and why money should be flowing to the safest and deepest markets on the globe. And we are still the safest and deepest markets.

We are still the world leader economically, politically, certainly militarily. To put numbers on it, at the basis level, the U.S. consumer spends $20 trillion, $6.5 trillion or so of that is on goods. The world wants access to that. The president is correct about that idea that while how he's going about it

and the tone and all that, we can debate. Conceptually, you do want access to that market. And in that sense, the US exceptionalism remains unrivaled. All right. Let's bring in Stephanie Gild now of Robinhood. She is the chief investment officer. It's nice to have you join the conversation too, Steph. Welcome back.

What do you think about what Dan has to say here? I was certainly more cautious than Dan leading up to this. And I sort of agree that I'm still a little more cautious, although more cautious than Dan leading up to this and I sort of agree that I'm still a little more cautious although less cautious than maybe I was pre the pause on tariffs. The way I've been thinking about investing is that we kind of have three baskets and eggs in all of them and they're sort of set up for each of the outcomes that could happen. But I've been assigning different probabilities to them now than maybe I did before where you know I have a sort of

fifty percent probability that tariffs will be at some level and it may slow growth in certain pockets but it's not enough to really lower rates or inflation although we obviously are going to get some benefit from lower oil prices now that

we're seeing. And for that we've been mostly allocating dollars to low volatility stocks and also making sure we have some international equities. lower oil prices now that we're seeing. And for that, we've been mostly allocating dollars to low volatility stocks and also making sure we have some international equities. I think US exceptionalism is hampered right now and I don't know if it'll ever be like only invest outside the US, but we've definitely over the course

of the last like 50 years have gone through periods where it was better to invest in outside the US versus not. And that's been sort of this year so far. And those trends can continue. The other two baskets that we've been making sure we have some capital in has been the probability that there could be just higher tariffs for longer. I think China is gonna be the stickiest point.

And the Fed even said that I'm actually in Beverly Hills as well. And I heard him say, like, you know, that we essentially have an embargo with China at this point and it's not sustainable. And so that just tells me that, you know, there hasn't been a lot of talking there. And that's gonna affect us in future quarters,

even though this passport didn't show that. And for that, I just, we do have some capital allocated to. And for that I just we do have some capital allocated to things that are safer like we do have some more T-bills than we normally would. We have had some dividend stocks allocated to that. And then the third is you know the best case scenario which is low tariffs or maybe no tariffs even in the future because the deals turn out to be that way. And for that you just want to own some cyclical names and that I had kind of a 30% probability for. So I think it's just an environment where diversification

continues to be really important. Not to mention, Stephanie, this past week, I think we were reminded of just how incredibly resilient this economy is, that it continues every step of the way to defy, if not logic, the odds. People keep spending. I think the Fed put out a paper, I think it was last week, talking about the difference between the soft data and, you know, just sentiment versus the hard data. And I think one of the takeaways I got from it was, you know, people continue to, they're spending more. So it feels like they're less wealthy, but they're still spending more.

And I think that's what's continued to show up. The thing I'm looking for in the future is how the shipping cancellations are really gonna affect consumer prices here, because that could actually start to put a damper on the hard data. We're gonna get a Fed meeting this week. Let's not, Dan, forget about that.

Fed share has been pledging patience, You know, we're going to get a Fed meeting this week. Let's not, Dan, forget about that. Fed Chair has been pledging patience, felt they were in a good spot to do that until the whole tariff thing came around. But even now, just given where the labor market is, the resiliency of the economy, the way that the equity market has bounced back, he's probably feeling pretty decent about their position going into this week. They can certainly wait. There's nothing right now that screams for a cut other than the administration screaming

for a cut. I don't see any reason why they would signal anything right now. And on top of that you do have this age old debate about how the Federal Reserve or Central Bank is supposed to respond to what we'll call one time price increases. That is to say tariffs are going to come, their prices for some items will go up, some others may go down, and how the Fed responds to that is still an open question. But I would add, and I think we just brought this,

Stephanie just brought this up, you've got WTI right now at 57. Oil, gas at the pump is on its way to probably the mid-250, 275 range. That's an incredible incentive for consumers. Obviously you want it to go down for the mid 250, 275 range. That's an incredible incentive for consumers. Obviously you want it to go down for the right reasons, which is supply going up, which is what's happening with OPEC increasing production

rather than the opposite. So we'll see how the consumers respond to that. But yeah, I think the Fed this week is gonna wait and see. All right, let's now bring in CNBC senior markets commentator Mike Santoli. He is here at Post 9, returning from Berkshire Hathaway's annual meeting. It's

great to have you here. I'm sure it was great to be there and somewhat jarring to sit there and hear Warren Buffett himself talk about succession. As much as this was set up as much as any rational attendees said this is just a matter of when not if

it was still surprising and it was dramatic. I think the way it was delivered and there's a way of framing it that says wow the ultimate take a walk away at the top move because of how the stock has done. I mean it's kind of surpassed in really in recent months almost any of its subcomponents right all the quality stocks that it sort of resembles, all of the financial plays, everything about it, whatever makes it up, was given a premium, and it has been in large part the Buffett premium

and the safety premium, and he's handing over a company when he leaves at the end of this year as CEO, that has probably unrivaled financial flexibility and optionality built into it. The question is, what do you do with it? Well, I was gonna go there. What do you think he does with it? I mean, he made the point that he's gonna step back

at the end of the year, but he's not going anywhere. And he made that point as well, which has some wondering if something with the cash mountain, because a pile doesn't even adequately describe how big the cash mountain is, if he does something with that as his last act? I think that's gonna be purely dictated by circumstance and events,

because I don't think he thinks of, look, I have 300 plus billion dollars burning a hole in my pocket. It's if the conditions of some kind of crisis, of some massive private company that decides it's ready to sell, that he thinks is very attractive, if that comes along, he doesn't want it to happen without him, and he thinks he can sort of lend

some support and help if there's that kind of a decision to be made, I think that was somewhat trying to reassure the investors that if we get into one of these environments where it feels like you need a snap decision as to whether you're gonna deploy tens of billions of dollars, the guy who's been there for 60 years will help out. You know, Stephanie, I'm thinking here as we have you from Robinhood and trying to think about Mr. Buffett's legacy and his impact on all of us and those who invest in these

great stock markets and all the markets that we have here. And dare I say that I'm not sure Robinhood would exist today if not for somebody like Warren Buffett who turned generations of people onto investing in stocks and the markets in general and the way that we all think about compounding and buying low and trying to sell high and being engaged in the process and trying to grow your wealth over a period of time no

matter how young you begin and how old you leave. Yeah, he absolutely provided a great philosophy and base to get invested. We obviously provided the way to do it. And so I think like that you know his legacy I think is a lot of the things that we see our customers actually doing. We see our customers investing in things when they go down, right? So that's that you know be fearful when everyone's greedy, be greedy when everyone's fearful and we see them doing that on the individual stock basis. Apple's actually like you know we see that's been down

and that's what people have been buying more of and they've been selling some of the things that went up like Microsoft. And so I think that actually is a direct relationship to the way that Warren has always approached markets. How would you address this? You know, what sort of legacy he leaves for somebody like you, people who are watching,

just what he meant to the kind of conversations that we have every day. I listen to these unquestionably the greatest investor of all time. I think those of us who find our way to Graham and Dodd at some point, and that's a large chunk of the investing universe, eventually finds their way to Warren Buffett. And I think the two will forever be interlinked. I will be the party pooper for a mid-year. And Mike, tell me if you think I'm wrong here. A lot of this recent legacy is defined

by a single decision, which is that to buy Apple in the middle of the last decade. And listen, that's not to take anything away from him or Berkshire or what Greg's inheriting. Well, that is true, although his Apple stake today represents only about 5% of the market capital of the company. $60 billion of Apple, it's a $1.1 trillion company. And without that, a market performer for the last couple of years.

Oh, in terms of his portfolio performance. More recently, a lot of his, and again, it speaks, I don't mean that as a criticism, per se, well, if not for Apple, who's Warren Buffett? I mean, it's amazing how making one correct decision can mean that much app performance in separation. I will even, I'll take it to a different degree, I think, in that somebody who,

when technology was all the rage in the late 90s, before the dot com crash, people criticized Warren Buffett for not buying the stocks of where the puck was going. And he was very clear, I buy what I understand, and I don't understand, I'm paraphrasing, obviously, but I don't understand what all this stuff is or what all of it means or how to analyze companies that aren't even profitable and where they're going to be.

And for Apple, a technology company, to arguably be his greatest or certainly one of, at the top of the mountain, investments that he's ever made, shows the full arc of the man in some respect. It also though, it shows that he was able to kind of think about it as a consumer staple and he could actually look at the units times price, it gives you the margin and it worked for him.

And I also think the great thing about Buffett is he'll be the first to admit he missed a lot of these. He missed Microsoft when it was really early and cheap. And he acknowledges all that. So I would say that it boils down to a very rare blend of opportunism and optimism. Because long term, he always says, this country is better than it ever was. It's gonna be even better in the future. In the meantime, if things look bad in the moment

and there's a crisis, he wants to be the backstop. Yeah, always bringing common sense to no matter what the times hold. Mike, thanks. Stephanie, thanks. Stephanie, thanks. Dan, we'll see you soon. Thank you, sir. All right.

Let's send it to Christina Parts-Nevelis now for a look at the biggest names moving into this close. Hi there. Hi, Scott. Well, let's start with on-semishares, because they're tumbling right now about 7% or so after the company reported early signs of industrial recovery, but warned that its crucial auto segment remains

weak outside of China. You've got managing and cautioning investors that margins won't really improve for at least two quarters despite increasing manufacturing rates or utilization rates. You can see shares down actually 8% now. Reddit shares are bouncing back about 4% or so as Wall Street is betting that the Google search related user growth slowdown is really just a temporary speed bump rather than a serious roadblock. Investors seem convinced by specifically Seaport analyst arguments that came out this morning that Reddit's long-term monetization story remains intact and that the stock valuation right now is a bargain worth scooping up after the recent pullback that we had last week.

Shares up almost 4%. All right, Christina. Thank you, Christina. Parts of Nevalos. We have some news out of the CFTC. Contessa Brewer joining us now on the news line with the headlines. Contessa? Yeah, Scott, the Commodities Futures Trading Commission, this is a federal agency that

oversees not only commodities trading, but the predictions markets, has thrown in the towel in its opposition over elections prediction trades or elections bets. You might remember that Cal-She had sued the CFTC to allow these election trades to go forward. A federal court before the election last November said that they could continue to accept those trades while the court deliberated. And today the CFTC has said it will no longer appeal this. This is a big move in favor of Cal-She.

It has had a series of legal wins, not just over election trades, but also sports trades as well. New Jersey, a court just in New Jersey had handed Cal-She a win that allows Cal-She to continue to offer trades on sports. And this is a real game shifter in the landscape for wagering, because what it does is it opens the door to these sort of predictions markets or bets in all 50 states where if you look at sports, Scott, it's only legal in 39 states right now. The biggest, California, Texas don't allow any kind of sports betting in Florida. Hard Rock and the Seminole Tribe has the monopoly and the big commercial operators like Fandel

and DraftKings don't get a chance to operate now. This creates a whole new playing field and opportunities not only for the likes of Caoshi and interactive brokers but potentially even new players or sportsbooks to come in and offer predictions trades. Interesting, interesting. We'll follow it. Contestant, thanks for the headline. That's Contestant Burrow.

We're just getting started here on Closing Bell. Coming up next, Intelligent Alpha's Doug Clinton. He's standing by with what he'll be watching for when Palantir reports today in OT. He'll join us after the break. Hey, Scott. The Washington Post is reporting that President Trump will sign an executive order today to incentivize domestic drug manufacturing. That's according to White House officials who are speaking on background.

And a few of the different policies that will supposedly be in this executive order are directing the FDA to reduce the amount of time it takes to approve pharmaceutical manufacturing plants in the U.S. as well as directing the EPA to accelerate the construction of facilities related to manufacturing of drugs and their ingredients. Now these are both important components because we've heard from some of the CEO's companies like Eli Lilly that's building many manufacturing plants

in the U.S. that it can take years to get these things built and permitted and that's one hurdle. So of course that's a big step for these companies. So we'll have to see exactly how that plays out and if this does in fact incentivize more manufacturing in the U.S. Scott. Angelica, thank you for the update. Angelica Peebles, tech investors get another read on the AI trade today when Palantir reports earnings in overtime here to discuss his Intelligent Alpha founder and CEO Doug Clinton. Welcome back. It's nice to see you. Good to see you, Scott.

This has to be the ultimate stock to give you a barometer of momentum in the market. When momentum rolled as a factor, this stock led the way. When the markets come back, this stock's done unbelievably well. So what does that mean for tonight? Well, I mean, to your point, Scott,

up 60% in the last month are Palantir shares. So I mean, I think the reality is the bar has to be pretty high. You know, you look at the price action of the stock coming in and whenever you're up 60% in the last month, I think that says that you have to really not only beat expectations, but beat them handily. And that's what Palantir has sort of been doing the last few quarters. It's not a stock that we own at Intelligent Alpha. The challenge for us is not that it's not a great business, because I do think it is.

The challenge, though, is you look at it fundamentally trades at 70 plus times revenue. I think it's just hard to see how do you get a long term return if you're not just trying to trade it. What do you think we learned last week about the AI trade in general? And I ask you that in the context of what Brad Gershner of Altimeter told me a little bit earlier today about where he thinks we are.

I'd like you to listen to that and then give me your own answer. We're just getting started. We're in the first inning. This is 2000 to 2003 internet time here. And what we heard over the last few weeks is all of the biggest companies in America continue to double down on their investments in AI and they're seeing the paybacks. First inning.

You agree? You know, I might have said second inning. I would say, though, I hope we're not in the 2000 era. He mentioned that. That wasn't a great year for the internet trade. I think we're more like 1994, 1995. So I would agree with Brad that it is still early. And to your question, what we learned last week from the MegaCap tech stocks, we learned

that despite this consistent narrative that eventually things have to slow down, the hyperscalers are not slowing down. We're hearing consistent commentary. Amazon talking about as soon as they put infrastructure in the ground, it's already at capacity. Meta talking about new products that they're building on AI, including hardware. And Microsoft, the one that we keep kind of hearing these rumors about maybe they're going to cut CapEx, they reiterated their numbers too. So I think the trade certainly fundamentally is intact, but I think that the excitement

from the investor community has still not yet come back. Your implication though is that if you're as early as you suggest in terms of those years that it eventually ends badly because that's what it did. I feel like his was more, we're on the other side of the some crazy and now we've really focused on the best and the brightest, the NVIDIAs, the Microsofts, the Metas, the Alphabets, the Amazons, right? We're not so much paying attention to the throw AI in your name stocks, we've actually weeded some out. We have a little bit, but again, if you're early, I think definitionally, you also have to believe that at some point it does get crazy. Because if you're not early and it doesn't get crazy, then this AI boom that we're talking about may ultimately be disappointing.

Logically, as you look back throughout history and the flows of capital into these new emerging technologies, the reason that we get to crazy, the reason that we get to these bubble levels is because you need a lot of capital to come in and make sure that all crazy ideas get tried because some of them end up being really good and also to reduce the cost of the technology for widespread adoption. And so I would say I think we're still very early. I think we probably do get to some sort of crazy level and we're still several years from that happening.

We'll leave it there. I've got some more news I have to get to. Doug, thanks. We'll see you soon. That's Doug Clinton joining us here on Closing Bell, sticking with the AI trade. In the last hour, OpenAI announcing an updated plan for its structure. Kate Rooney joins us with the details.

Hi Kate. Hi Scott. So OpenAI giving us an update on its restructuring plan. This is in light of some pushback from civic leaders and ex-employees around safety concerns. So OpenAI is gonna be pivoting from prior plans it's talked about to spin out the nonprofit and then create a separate full profitprofit company. This is a 300

billion dollar company, one of the most valuable in the world at this point in terms of private markets, saying today it's going to continue to be controlled by that original nonprofit. It's going to retain a large ownership stake as well. Chairman of the board Brett Taylor and CEO Sam Altman today saying this decision was made after hearing from civic leaders and then engaging in what they called constructive dialogue with the Attorney General of Delaware and California on a call with reporters. Executives did push back on the idea that this was in any way a response to Elon Musk's attempts to block this restructuring. He was also a founder of

this company, Brett Taylor, saying the only basis for the decision was to set up OpenAI for the future. Altman, for his part, telling us this does not change any sort of investor plans, including SoftBank, which had a clause in its last investment and saying that if it didn't restructure, this company didn't restructure fully by the end of this year, it could actually lower that amount. Altman's saying that's not the case. Investors are on board here, Scott.

All right, Kate. Thank you, Kate Rooney. Up next, CNBC unveiling its ranking of the world's most valuable soccer clubs. We'll discuss coming up when the bell comes right back. Welcome back CNBC unveiled its rankings of the world's most valuable soccer teams today. Average team now worth 2.76 billion that's far below the NFL and NBA averages but on par with baseball valuations. The most valuable team on this year's list, Real Madrid, worth $6.7 billion, followed by Manchester United,

Barcelona, Liverpool, and Manchester City. Joining us now is Michael Ozanian, the man behind the list, and CNBC senior sports reporter. It's good to have you here. Great to be here. Should I be surprised that Real Madrid is number one and not a Premier League team that it's somebody from La Liga or no? No, I wouldn't be surprised because unlike in the US, Scott, where you and I have talked about in the past,

you mentioned the NFL, the money is split evenly with broadcasting deals between every team. Doesn't matter if you go 17 and 0 or 0 and 17. In European soccer, a lot has to do with how well you do on the pitch. So you talk about Real Madrid, they regularly either win La Liga or certainly near the top. And they have the record number of Champions League wins in all of football, which is what they call it over in Europe.

I think 14 or 15 times they've won it. And that could give you that winning first in Champions League could bring in another hundred and fifty hundred and sixty million in revenue. So they also have the new

stadium there. Stadium economics are great for them. They doubled their matchday revenue last season. OK. So I look at the list now when you're telling me that how you

do on the pitch actually matters to where you go in the Ozanian rankings, man, you, they're terrible now. Yeah, yeah. But yet they're still, they still have the cache of this incredibly powerful global brand that gives them the valuation that you put on it. Yeah, but I, you you know I wasn't that kind to him Scott because I valued him at six billion which is less than

the valuation when Ratcliffe bought his state. They're going to miss out on the Champions League next year. So we've knocked them down a peg from the most recent investment. I thought maybe you're going to have Arsenal Stan Kronke's team

up there. Big stadium. They do well by the way they ousted Ray Al Madrid from the Champions League most recently. Rabid fan base. I mean they seem to have all the economics in place to be high on

the list. They don't even make the top six or seven of which they've done very well since Kroki made the investment. And to your point the Champions League you're going to see their revenue go up significantly this year and you're also going to probably

see their value go up but their fan base in general as a global brand is not as big as Manchester United. Some questions then whether Man U is gonna get relegated this year I mean that's how it's been tough. Man U fans you know what I'm talking about. Mike, thanks. Mike Ozanian. For the full list of global soccer team valuations, you can head to CNBC.com slash sport or scan the QR code right there on your screen. Up next, we track the biggest movers into this close. Pippa Stevens is standing by with that. Hey, Pippa. Hey, it's got one. Staples stock is moving lower. After earnings, we've got the name

to watch coming up next. We're 15 from the bell. Let's get back to Pippa now for the stocks that she is watching. Tell us what you see. Well, Tyson Foods is in the red after earnings disappointed the street as record high cattle prices pressured results and with the company just reiterating its outlook thanks to ongoing tariff uncertainty while the chicken and pork segments held up fine, CEO Donnie King said beef is, quote, experiencing the most challenging market conditions we have ever seen. And Sanoco down 6% after announcing it

will buy Canadian rival Parkland for $9.1 billion, including debt. The acquisition will expand Sanoco's geographic footprint as well as its network of retail locations. Scott? All right, Pippa, thank you. That's Pippa Stevens. Still ahead, we'll tell you what to watch for when Ford reports in overtime.

We are back on the bell right after this break. All right, programming note for you. Don't miss an exclusive interview with Nvidia CEO Jensen Wong and ServiceNow CEO Bill McDermott live from ServiceNow's Knowledge 2025 conference. It's out in Las Vegas. It is tomorrow and it's Knowledge 2025 conference. It's out in Las Vegas. It is tomorrow and it's on Power Lunch. Up next, I'll tell you what to watch for when Mattel and Ford report their earnings in overtime tonight. The Market Zone's coming up next.

We're now in the closing bell Market Zone. CBC senior markets commentator Mike Santoli here to break down these crucial moments of the trading day. We have two earnings reports. We're watching an OT. Courtney Reagan on Mattel. Phil LeBeau on Ford. Mike I begin with you. Probably lose the nine day streak today barring something dramatic in the last five minutes or so. But it's been a great run. Today's just

about kind of treading water a little bit mostly. Yeah. Also interesting about half the S&P decline the net decline is Berkshire Hathaway and Apple on the Monday after forever warming up and handing it handing it up. Yeah, I don't even know if you wanted a root for a 10 straight up day.

I look back the last time you were up 10 or more was in July of 2023 and when it ended you almost went into a 10% correction immediately. So it's not to say that streaks are bad. It's just that when they stall out beyond extremes, it means you're not getting too stressed. I do think that in general, up 3% last week in the S&P, up 17% up to low, like you've been saying, it creates for, at best, a more balanced tactical view, just because it seems like you need to have more obvious incremental positives to get up from here toward the old highs, rather than just excessive negative positioning and-case scenarios running through everybody's head alright Courtney Reagan

There was a lot of talk this weekend about dolls and how many we should have well today with Mattel We're gonna find out perhaps how many toys we can actually get that given the trade war you took the words right out my mouth I mean analysts are missed estimating that Mattel will report $786 million in revenue with a loss of 10 cents per share, adjust a gross margin of 47.9%. But as you say, investors really are going to be focused on any commentary from Mattel. Of course, the maker of Barbie, an American girl, about its tariff mitigation plan, especially after those comments from President Trump saying children maybe just need to be okay with two dolls instead of 30.

I think Mattel would beg to differ. Well, Jeffries estimates about 22% of Mattel's revenue and cost of goods sold are exposed to U.S. tariffs on Chinese imported goods compared to 17% of Hasbro's. Now, Mattel is coming off its worst month since March of 2020 down about 8% this year. Hasbro up about 11% year to date. So pretty divergent performance there. Now Mattel has said it plans to close a production facility in China in 2025, but I think in light of the news

that came out on April 2nd and the iteration since then, investors still have a lot more questions going forward. Court, thanks, Courtney Reagan. Phil LeBeau, I mean, so many twists and turns around autos, obviously. I guess good time to hear from Jim Farley about what he thinks of pull forward demand, all the above. Oh, yeah.

And, look, when you look at Ford's results when they come in just a few minutes, it's clear that it's less about the first quarter as it really has been for all the automakers. It's really what's going to happen from here. So what's the tariff impact? That's going to be the primary question that come out of the forward earnings results. Not just for the second quarter, but for 2025. Will they adjust production? Are they going to further curtail their EV plans? In terms of profit and loss, the estimate is essentially for a two cent profit. That's what the street is expecting for the first quarter for the full year. And let's see if they

keep the guidance. They're expected to earn a buck 10. Don't forget tomorrow morning first on CNBC on Squawk Box. You do not want to miss what Jim Farley has to say. He's been pretty candid about his thoughts on what's happening with the tariffs. We'll see what he has to say tomorrow morning. Scott numbers in a few minutes. Look forward to that Phil.

Thank you. That's Phil LeBeau. I mean some of these Mike Mike, meat and potatoes, tariff stocks, I mean, the ones that really are in the center of the storm, like Ford and some of the other OEMs. They're in this limbo, this extreme version of limbo here, where nobody is going to be able to really project ahead to exactly what it's all going to mean. But it feels as if we at least have to be alert to the possibility that they get some relief from here. I do think that's one of the reasons the market

is trading this way. Everybody knew Treasury Secretary Bess was gonna be speaking today. Maybe there'd be an actual deal as opposed to just a promised one. So that's the dynamic we're in right now. The jobs are bored on Friday, probably came as a little bit of an upside surprise to the psychology,

but in itself, in an objective basis, if you look at the cyclical indicators within it, it was kind of treading water. I mean, that's kind of what we're doing. We've decelerated, we're definitely not completely kind of in an absolute downtrend, but we're suspended at this moment of it's fine if it stays this way, but if we actually get the tariffs imposed, we have to reevaluate. I think treading water was okay. I mean, there was some fear that we'd be sinking, right?

And we're treading. It's for sure. And the credit markets have affirmed that. They've improved in the last few weeks as well. Palantir tonight as well. Import and Gage stocks up, it's been a rocket ship, 60% a month or something like that. And to me, that's one reflective of the fact that the retail trader has really never left

and has come back in aggressively on this bounce. $300 billion market cap, it's remarkable. 60 times 2027 revenues, 2026 revenues. So yes, I think as a risk appetite gauge, as a willingness to believe in terms of the big themes that Palantir has been drawing from for a while, it does matter at this point as we sort of round out earnings season and probably better than feared for. Bell's going to ring.

It will mark the end of that nine day win streak. Longest since 04. Not a bad day, just the streak ends.