Closing Bell - Closing Bell: 5/8/25

Episode Date: May 8, 2025

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

Welcome to Closing Bell and Scott Wobbner live for Post9 here at the New York Stock Exchange. This make or break hour begins with rising stocks as a trade agreement with the UK gets announced, called by some a small win nonetheless though enough to send the major averages higher this hour. Here's how things look with 60 to go in regulation. We are as I said in the green across the board nicely so as well. We'll have more from the White House in just a moment on the comments by President Trump today that added a leg to the jump in the market. Alphabet, worth watching.

It's bouncing back today following one of its worst days in years on concerns about its search business. There's the stock two and two thirds percent. Most of the other mega caps are also higher today. Tesla, a better than four percent worth watching and we will certainly do that. It does take us to our talk of the tape. How far can this bounce back go?

Let's first go to the White House and our own Eamon Jabras. He was in the Oval Office earlier today. Eamon? Yeah, Scott, the president said it's a good time to buy stocks today. The comment came in the context of his discussion about the tax bill coming up. They say it's going to stimulate economic activity. They say there are a lot more trade deals waiting behind this one. The president expressing some optimism about the negotiations that are going to happen in Switzerland with the Chinese delegation and Treasury Secretary Scott Bessent over the weekend. Here's what he said though on the stock

market. Take a listen. I believe it's the biggest bill of its kind. I'll let you know, we have to get a vote, but we have a lot of support for that bill. And if that happens on top of all of these trade deals that we're doing, this country will hit a point that you better go out and buy stock now. Let me tell you, this country will be like a rocket ship that goes straight up. Well, Scott, the president there saying you better go out and buy stock now. I also asked him about this issue of price increases. You know, we had the CEOs of Ford and Mattel saying over the past week they're going to have to raise prices on certain products.

The president said, though, Scott, he just doesn't believe ultimately that those companies are going to raise prices. He says that they're trying to negotiate with him in public by making those kinds of announcements. He said ultimately he believes that the companies can absorb the tariff hit and they will do that. He doesn't think American consumers are going to see a hit to the wallet here, Scott. I mean we've already seen some price increases so that's called into question for certain and we'll potentially see what happens from here, these big events over the weekend, and then into next week.

Eamon, thank you so much. That's Eamon Javers on the North Lawn, as always, at the White House for us. Quick programming note, don't miss a first on CNBC interview with the Commerce Secretary Howard Lutnick. That's coming up in just a bit in overtime. Let's bring in Trivariate's Adam Parker now. He's also a CNBC contributor. It's good to have you here.

You've been more negative lately. Are you too negative? I mean, today I am, for sure, but I just don't believe it. We're down 3% year to date on the S&P after two pretty monster years. And I think if you go back to January, I don't think people thought we

were gonna see what you guys just previewed you know empty ports in Long Beach and you know pull forward in demand and tariffs at 10% and I think the market rallied for three reasons right some technicals you know when the VIX came down and I think maybe you know optimism on on some negotiations and then maybe better earnings season. Like you didn't see any really tellable earnings. Visa said things were okay. Enough that earnings were fine.

Yeah, we're good. Earnings were better, people thought. They were better than I thought. Guidance was better. Better than I thought for sure. And so I think that combination gave us a big part of the relief rally, but I'm in the camp that there's damage that's done,

meaning there's just a lagged effect between the implementation of the tariffs and when it hits some of the earnings. That's what they said about when the Fed started to hike rates, lag effect, economy's gonna go into the can, we're gonna have a recession. I don't know if we're gonna have a recession.

I just don't, you know, if you talk to management teams of big companies, industrials, et cetera, just some spending slow, I think inventory is gonna build. I think production exceeds consumption. I think there's dislocation. So I tend to believe the companies when they say they're gonna raise pricing.

Well, I mean, some already have. Yeah, some already have. Yeah, and so I wouldn't panic if it was just autos and airlines that are pulling their guidance. That's not that big of a deal, but I do think you're gonna see it a little bit more broad-based. Low consumer confidence means some of the consumer data will likely slow. It doesn't always, though, right?

That's the big question, whether the soft data, the surveys, will translate and transfer into the hard data. Totally. Look, part of me wants to say, look, I'm wrong because the thing that usually is right is the price action and that happens first and then the second thing is the companies tell you stuff and then the third thing is, you know, six months later the economists will tell you stuff.

Like, we know the jobs data lags, so if you're waiting for that to get worse, you know the market's gonna be disparate, but I just think this is a little bit of a shorter term rally and then we're gonna be left with bouncing around, you know, between, you know 5,200 and 6,000 until we just get much more clarity on resolution on some of the tariffs and the one that really matters is China and I just haven't seen like a lot of progress there. Well there's been no

progress but the Treasury Secretary is gonna be in Switzerland over the weekend starting talks. That sounds great I think last week he said he didn't even know if the president had talked to Xi. I know, but this is happening, right? Now we have some clarity. There is a meeting. They're going to be talking trade. So it might be incremental, but nonetheless, they're having meetings. Yeah, I think that's right.

And I think that's actually positive. The second derivative of the conversation is positive. but we're down 3% year to date and damage has been done already and it's more than 3% in terms of the fundamental outlook. I took my 26 earnings and made it my 27 earnings just thinking one year of growth was out. So maybe that's 6%, 7%, 8% earnings growth. And so the market's acting like it's gonna be way less than that. And we'll see, but I think it's not as easy as, hey, it's all over and we buy stocks because the president tells us so. But you don't think that what he says, taxes plus deregulation plus trade deals equals

why wouldn't you buy stocks? No, I don't. If I told you we're gonna get all that, why would you come up with a different answer? What is the text? You're like I have a PhD in statistics. I don't think that math works. I don't think the math works. And the president has gone bankrupt a few times.

Every deal hasn't worked out perfectly. I'm saying he's got a track record for some investments that aren't perfect. I think that's a factual statement. And so I would say he doesn't know. He's just trying to pump the market up and get optimism up because confidence is terrible and I think the reality is that it's not that clean okay so what I would look for is

companies that margins can go up in the second half of the year well if they have rising input costs it can't raise pricing in my lifetime I don't believe Pepsi and P&G missed in the same quarter ever like this real companies are having problems passing on pricing I don't know what what he's talking about so I think you're gonna see that roll through more of the market later this year and I just think you got to be careful. So on the defensive side I'm really trying to find businesses that are tariff-free, China-free, have pricing power. Waste management or you know

aggregates like Martin Marietta or Knife River or you know Volkin or you know maybe it's the drug distributor. Things that I don't think their earnings, estimate, cheap abilities, fouled up by what's happening. And then if you gotta buy offense because you just gotta participate whenever there's big updates, then you gotta take your shot at,

is it the alts with KKR Blackstone and Ares or Apollo? Is it Dell or something that maybe, if there's an upgrade cycle, you gotta find some offense. I'm not saying this is like an apocalypse. I'm just saying it's not as easy as we damage things, no problem, we're down three after being up 50 and life is good.

I think that's a little whistling by the graveyard for my current mood. Okay, let's bring in Shannon Secocia now of NB Private Wealth. She'll be more eloquent. She's also a C&C contributor. I'm glad you were here to hear all of that. Uh-oh. What's your response?

Well I think you know you asked about confidence Scott and you asked about the fallibility of relying on consumer confidence as a harbinger of what's going to happen in the economy and I think that's what it comes down to. We think about business confidence and you know we've seen CapEx expectations come way down since November 5th and they've really come down in the last four weeks or so and So I think what you need to do is you need to take a step back and you need to think about why were we Optimistic coming into this year and can that still unfold in the second half of the year?

We're not talking a lot about the tax bill right now But there are going to be some very pro business aspects that are going to be put into this tax bill It is going to be either expensive Scott or very expensive That's just those are the two categories of what this tax bill, it is going to be either expensive, Scott, or very expensive. Those are the two categories of what this tax bill is going to look like. So if I'm sitting back and I'm taking stock of where we are today, I'm looking at this June timeframe is particularly tricky because you're going to get the confluence of wondering what the Fed's going to do, wondering what's going to happen with the tax bill, and the

potential expiration of that 90-day delay. And so if you're looking for potentially this opportunity where, you know, if Adam doesn't feel comfortable adding exposure right now because of the rally we've had, I think you're going to have another opportunity come June into early July where you can start to reposition for that second half of the year. I'm more optimistic about the potential accelerants that could be included in that tax bill from a stimulus perspective. Our concern, Scott, is what happens with the tenure?

What happens with the bond market? What's the reaction to that really large tax bill? Because you can offset some of this tariff impact. It's not just gonna be taxes on tips. It's gonna be business motivating investment in, you know, that's what's gonna be the motivation. But I think that that's the concern, is how does the bond market react to something that again is going to probably be either expensive or very expensive plenty by

the way plenty of people agree that damage has already been done I'm not in any way suggesting that nothing bad has happened as a result of the way that this policy was implemented whether you agree with the policy result of the way that this policy was implemented, whether you agree with the policy or not, the way it's unfolded, now the market's rallied back. So it's masked a lot of the initial upset. Damage done to the brand of America, people have said that, Hank Griffin and the like. Damage to confidence, the surveys have said that. Damage to CEO visibility, the leaders of the great companies of this country

have said that too. I bring that up only because this was a, as others have said, an own goal, a self-inflicted wound that can so easily be switched, can't it, with more deals. If we have progress with China, if the tariffs go down from 145%, which I think we all believe that they will at some point, and maybe sooner rather than later,

let's just say for baseline for the conversation, can a lot of the negativity that I just said to confidence, visibility, can that change too? It can. And I think you want to buy stocks three months before, six months before the fundamentals bottom. So the question is is are they gonna bottom when we didn't even see any downward revisions yet when the estimates are way too high? I don't think so. I think it's probably sometime Q3, Q4 earnings where we really feel like things can bottom and grow and then start seeing the benefit of maybe some of the regulatory release or tax benefits

and the like. And I think, you know, Shannon makes a great point. I'm not one of these bond vigilante guys, but I do do a lot of meetings where people are worried that at a wartime level of deficit we have and then we've got to kind of, you know, risk in the economy slowing a little, that could go higher, that we really have some challenges with the bond market.

I agree with that logic. So I just, what I mean by that is I'm not sure I'm gonna pay a higher price to earnings six months from now than I am today. And so I'm left looking at the fundamentals. And I, and you know, I just wanna own stocks where the margins are going up. And if guys are raising pricing

and they can't drop it all through, I just think it's gonna be hard. So I'm looking for, what is it? It's the HVAC business. Like there's things reporting, they're giving me, I wanna buy some stuff. I'm not, but it's not everything. But it's not, but it never was everything.

Like the mega caps have had a good week, right, of earnings. They've given you, I think, renewed confidence that things are going fine. There are stocks, I'm obviously cherry-picking other names Like you talked about playing a little defense while you can play a little offense and Netflix There are stocks that will prove probably to be recession resilient not recession proof Netflix isn't the only name on that list and it's not an HVAC company or an elevator maker Right or anything like that.

I did a dinner last night with eight large institutional investors. I always try to get Shannon to come, but she's 50-50 on these things. Anyway, and nobody in the room was bearish. Okay, and so the sentiment reversal I've seen in the last two weeks is shocking. I think the big move in price momentum really changed people's moods. And so you can't say you're contrary in bull anymore either. I don't think you can. I think you have to believe that, you know,

we like Goldilocks this interest rate environment. And you know, it's like, in fact, I think the most bullish thing would be the Fed doesn't do anything, right? They don't need to cut because things aren't getting much worse and they don't, you know, need to hike because they're worried about, you know, rising prices later in the year.

And they can actually thread the needle. Maybe that is bullish. For the meantime, you kind of have that, right? Powell said 5,000 times yesterday that they're going to be patient. They don't need to rush into anything. And if there comes a point where they need to have the mandate, the mandates have to fight with each other or there's friction there they'll make the decision when they see it based on what they see

could have been more vanilla uh... but the right the right you know path in terms of what the fed needs to do here because if you set up those alarm bells about inflation and you essentially take the the safety valve of being able to cut rates if we see on if we see unemployment spike up you know that's gonna feel very uncomfortable to the market. I agree with Adam. They would prefer to not do anything here. They would prefer to,

perhaps the soft data doesn't translate into hard data. Perhaps we get truly transitory, one-time price increases in goods. We're not going to have, or at least I don't think, Scott, we're not going to have the follow-on effect that we had in wages that caused the services inflation that really resulted in where we were at over the last couple of years.

So if I'm, you know, if I'm sitting on the FOMC, I would love to stay patient and wait and see where this goes because there's going to be plenty of exogenous effects on the treasury market with the dollar and with what's happening with capital flows. They don't necessarily want to exacerbate any of that. I mean, two things I think could be bullish that I just don't sink my teeth into right now, but could get me a lot more optimistic. Any real company with an AI proof case, right?

That still isn't over, right? I'll pick the dream scenario of Walmart comes on and says, we've gotten so much better at analytics that we probably won't have to hire net basis. Something that gets people like, like whoa margins are going up. McKesson or one of these companies with lots of employees that would be awesome and that would be a margin expansion story independent of the you know would offset the tariffs up and then you know you know maybe the real frosting on that cake would be we get back

to where we were election night where we start getting like M&A and you get you know five billion market software company taking out at seven and a half, and then it's like. You need that confidence though. Yeah, and I think that's, yeah, that's like, when we get like that three months forward, we think that's happening.

Then I think you gotta get more optimistic on risk taking. That's why I said maybe I'll buy the alts now, because they're still down a lot from the highs. Well you said you buy when you think we're six months from. Semi's is six, nine months, but you know, consumers maybe three months You know, it's certain industries are more anticipatory than others I'm just saying we're probably gonna have some level of the tax extension and deregulation over the next six months

I don't think either of those things are as positive as the damage from the tariff based my current guess Oh, but you know, I don't think that's a perfect V. But TBD. Well, let's take a look at shares of Alphabet. I want to check on those. Whether they're going to have a V recovery, I don't know. They are getting a little bit deep. Dear Jabosa, today following this really deep slide yesterday, and then what is this attempted rebound today?

A key emphasis on attempted, right? Because the rebound that we're seeing shares poised down the session maybe 3% higher barely makes a dent. And what we saw yesterday, shares ended down 7% on the back of those comments from the Apple executive, Eddie Kew, that said search in safaris declining, maybe introducing Anthropic, Perplexity, other chat bots into the walled garden, which really hits at that bare thesis that has plagued Google for the last few years. Even Google's statement on the back of those comments, they said, we continue to see overall

query search growth. But however, they don't talk about how they're monetizing that. We have known for a long time that this shift in consumer habits was happening from search to more query AI, query chatbot based. That's happening and now the fear is that Google isn't moving quick enough to turn it around and year-to-day losses still nearly 20%. This is quite the setup, Scott, going into its all-important developer, IO Event, where it shows off its latest advancements in artificial intelligence. Now it has to contend with this narrative that it may actually be losing market share in search,

which is still of course, it's bread and butter. Before yesterday, Scott, it's funny because there were so many AI wins, the story might've been different. It might've been one of a comeback as we head into I.O. in just a few weeks, but now Google once again, little bit on the back foot. So again, this rebound that we're seeing today

doesn't do a whole lot to counter the prevailing narrative of the last few years that has taken its valuation down to the lowest of the Mag-7. Yeah, Dee, thank you. Dear Jairbos, Apple really starting this whole thing yesterday with those comments from Eddie Kew, which our Steve Kovach was following. And now Apple has a new report about developing some specialized chips. What do we know here? Yeah, Scott, this is coming from a Bloomberg report just a some specialized chips. What do we know here? Yeah Scott, this is coming from a Bloomberg report

just a little bit ago that gives us a hint at some of the AI products that Apple may be working on. So according to this report, let's talk about the two things that are in here. First is smart glasses. The report says that Apple's working on new chips that will go into these smart glasses. It sounds very similar to what Meta has done with those Ray-Ban glasses.

Those glasses you wear, it has a camera and some speakers in it. You can ask the AI questions. It's kind of an always on assistant with you. It sounds like Apple is gearing towards that as a way to expand its wearables business. So that's one product. Again, not imminent. Sounds like this is going to take a couple years to work out. And then on the other side, some other chips, according to this report that Apple's working

on, it's for the AI servers that they run. So Apple's, Apple Intelligence system runs a little bit differently than some of the other AI systems out there, where a lot of it's done on the device itself, but then it kicks it over to the cloud, which Apple says is done in a very private way, and these chips are gonna be able to handle those processes better and more powerful AI applications. But Scott, as we've been talking about for much of the year,

Apple has to get the services side of the AI story right first. That big Siri delay that came earlier this year is just one example of what they need to get in place before these products can actually make it out to the market. So they still haven't given themselves another couple years. And again, at WWDC, that big developers conference a month from tomorrow, hoping to learn a little bit more of the progress Apple's making there.

So we'll find out more in just four weeks time, Scott. Yeah, we'll be there together. Look forward to that. Steve, thanks. That's Steve Kovach. We'll go back more in just four weeks time, Scott. Yeah, we'll be there together. Look forward to that. Steve, thanks. That's Steve Kovac. We'll go back to Adam and Shannon. I sort of glossed over the tech earnings that were pretty good.

Yeah. Let's finish this whole conversation with a view on MegaCaps, Shan. They've rallied back a lot from their lows, too. Yeah, but you're starting to see that real dispersion and divergence in terms of the opportunity set. And you look at just Apple, just that report right there, the shift in devices, new devices, that is nascent.

That still hasn't matured in terms of how are we going to be accessing data in the future state through Glass or through a phone. And I think the other thing is that there's some, I think, regulation, like regulatory overhang was really what people were worried about with Alphabet. When it comes down to it, Carrie said it best on your show today, right? Search is growing, but there are also going to be more participants.

And so you're going to, you may get a bigger pie, but maybe a smaller slice of that pie. And so I think, you know, Adam, you can speak, you just put out a great piece on this about divergence in the mag seven. But I mean, I just think it's actually an opportunity for investors who are continuing to try to broaden out their exposure. You can actually be selective here. You don't necessarily need to own all of these names. Yeah, I totally agree.

I think that- And she's pumping up your research. Well, the divergence of the group is, look, Google, you sit there, like one of the things we've all learned is like, sometimes bad is bad and sometimes bad is good because it's opportunity, right? If we walked into Google tomorrow and they let us be CEO and CFO, you would be CEO in

this analogy, I'd be CFO. For a day, what would we do, right? We would fire a ton of people. We could have our meta 2023 January moment, and the earnings trajectory would go up. We'd stop buying $250,000 Jaguars that can't move in the streets in San Francisco. There's so many. So at 13 or 14 times earnings for a company that still could grow mid-singles even with the share loss in the search business, at some point, it's like the bet is like an opportunity. So I think there's some things emerging that are going to create a lot of

dispersion in returns. And the whole Mag-7 name probably won't be what we call it a year from now. I mean, Tesla's not even top ten anyway or whatever so I'm with you I think it's gonna start breaking really diverging fortunes. Was it a trivariate or a trivector? Trivariate that was trivariate yeah but thank you excellent question I love where your head is I love where your head is. You too good having you guys good conversation. Adam and Shan we'll see you soon let's send it to Christina now for a look at the biggest

names moving into the close tell Tell us what you see. Scott, I'm seeing Peloton right now. Peloton's new CEO, Peter Stern, facing mounting pressure as the company reported wider than expected losses early this morning, as well as declining paid subscribers in the third quarter. The firm also anticipates a $5 million tariff-related hit to free cash flow, and that's how you're seeing shares down

6% but down nearly 25% on the year. Switching gears, Cleveland Cliffs also having an even rougher day than Peloton, shares down over 15%. The Steelmakers' Q1 results missed the mark badly and warned they would idle six facilities as they try to cut losses and free up capital, shares down almost 24% year today. Scott?

All right, we'll see you in a bit. Thanks. Christina, thanks Christina, parts of Neville. So we're just getting started up next, Bitcoin back above 100K a bit. Thanks. Christina, thanks. Christina Partsenevalos. We're just getting started. Up next, Bitcoin back above 100K. Bill Miller IV is standing by with how he is playing the crypto space right now. Just got some interesting news within the last hour that I'll have him react to as

well. We're live at the New York Stock Exchange. You're watching Closing Bell on CNBC. Welcome back. Bitcoin jumping above 100,000 today for the first time since February. And breaking just moments ago, the Senate failing to advance a first-of-its-kind stablecoin bill that would provide a regulatory framework for those digital assets. Let's bring in Miller Value Partners CIO and Chairman Bill Miller IV. It's good to see you. Welcome back. Great to be here. Thank you, Scott.

Let's talk about this news that broke as I was just saying it in our intro. What's your reaction to it, which the Treasury Secretary has come out with a statement as well, really excoriating those in the Senate who voted against this? Well, regulators have always been extremely concerned about stable coins in their place in society. I think they're afraid of losing control over the medium of exchange. But it's still very early from a regulatory perspective.

So the digital assets advisory boards recommendations aren't even due for another couple months here. And then beyond that, we go ahead and make regulations. So it's still really early within the new administration to even be talking about regulation, except that more clarity is on the way. I don't know if you saw, but a couple of days ago, the Fed just withdrew guidance that they had previously provided about requiring banks to give them notification if they want to engage in crypto custody

and those sorts of activities on behalf of clients. So we're just at the early stages of this thing loosening up but it's all very positive. Early but certainly an interesting stage just to tell folks what the treasury secretary said just 38 minutes ago posted on social media following this vote quote the world is watching while American lawmakers twiddle their thumbs senators

who voted to stonewall US ingenuity today face a simple choice either step up and lead or watch digital asset innovation move offshore it sounds to me like you say this is just too soon to make a final judgment on where all this is going. Yeah, that's right. No, but one of the most important things to keep in mind if you look at Bitcoin, it doesn't matter, right? Bitcoin doesn't care. It's back in the six figures with a lot of room to go. If you compare its primary functional use case, which is actually checking a balance on the lack of accountability and fiat unit creation, we still have a long way to go. So gold is a 20 trillion market cap.

Bitcoin is still two trillion despite functional superiority to gold. It's much harder to steal, much easier to store, much easier to instantly transport. And more importantly, you can actually audit it. So I don't know if you saw, but there's an estimate that said that auditing Fort Knox would take 44,000 hours and approximately 18 months to complete. I think it'd be a lot nicer for the American people if they could just go to a handful of auditable Bitcoin addresses on a blockchain explorer and see exactly where the American people's Bitcoin is. I want to switch the topic to Google alphabet because you made it a point

to make it one of your stock picks today. Obviously the market is reacting to this news from yesterday That was from Eddie Q of Apple where Google search on their browser Has fallen for the first time in April. Why isn't that an existential crisis now that investors should be running from rather than going towards? I Think the offset you have to consider is evaluation, Scott. So we're value investors and we look for gaps in between future cash flow expectations where things are trading. You've never been able to pay 16 times for Google, 16 times earnings and a five turn

discount to the market. This is a company that has 90% of search. They have seven out of 10 smartphone operating systems in the world, they're growing their top line at twice global GDP, they're growing their cash flows at 30%, yet you can buy them at a 5 turn discount to the market. So I think all of that is true and there are some challenges, but shame on Google if they can't figure out AI with all of this funding and all of this data that they have. So for us it comes down to valuation, We think Google is a very attractive bargain here.

I mean, there are some who are suggesting it looks like a bargain at 16, but deserves to be now even lower because this is such a serious threat to their cash cow business. Well they've done a pretty good job at allocating capital in the past and crushing the market. And we don't think that that's about to change despite the fact that the valuation says it. So I think there's a handful of ways to win here. I think if you look at the sum of the parts, the valuation is closer to 240 if it gets broken up and antitrust stuff. So I think there's a lot of ways to win here and it's just a cheap stock.

Bill, we'll talk to you soon. I appreciate your time very much today. Thank you. Thanks for having me. All right. That's Bill Miller, the fourth. next. JP Morgan, Private Banks, Abby Yoder is back with us right here. Post nine. She'll tell us

how she's navigating this big bounce back in the market where opportunity is from here. Next. All right, we are back. Stocks continuing to bounce today following news of that trade agreement with the UK and hopes of progress with China as talks

are now set to begin this weekend in Switzerland. Here to share where she's positioning right now, JP Morgan, private bank, US equity strategist Abby Yoder. Welcome back. Thank you. Are you feeling more bullish about the environment that we find ourselves in? We bounce back a long way and we get incremental positives related to trade as well. Well I don't know that we ever weren't bullish. We were like near the low end of our wide range for the year end target, 5,700 to 6,200. And the risk, like more towards the downside on the 5,700

was that we didn't get more clarity quicker, right? And we're starting to get that obviously, this UK deal is a big move forward. Whether or not that can act as a framework for other countries remains to be seen. I think there's a lot of differentiation. But I think for us, I mean, one Q earnings season was really strong, understanding that's backward looking. But we didn't get those guidance cuts that I think a lot of people were expecting or

a lot of investors were expecting. Yeah, for sure. So yeah, we feel pretty good about things right now. Even with that, some, you know, Adam Parker was sitting here and is like, I hear all that, but it's too late. A lot of the trade, a lot of the damage has been done from the tariffs already. It just is a lag effect.

We haven't seen the worst of it yet. How do you feel about that? I mean, I think that's like, I think that's the common narrative, right? That like, okay, we're about to go on, we're not in recession yet, but we're about to go in recession. And I think it's the common narrative, right? That like, okay, we're about to go on, we're not in recession yet, but we're about to go in recession. And I think it's important to keep in mind

the starting point, like we're just coming from a really like strong position in the US from both an economic standpoint, growing above trend GDP growth for the past two years, from an earnings standpoint, profit margin standpoint. So I think there's a lot of like pain that can be tolerated from the economy and companies. And I think it's a lot of like pain that can be tolerated from the economy and companies. And I think it's also important to keep in mind, like, you know, there are

growth policy growth positive policies that are, you know, next in line to be implemented by this administration. And we're only in May, right? So we've had the growth negative policies implemented up front, which is very different than Trump 1.0. But we do still have that deregulation tax extension in the pipeline that I think could... Well, I mean, that's what the president himself tried to make the point of today in the Oval Office, right? Yeah. Buy stock on that view. We're going to get trade deals.

It'll be debated from here to eternity what kind of deals they actually were, but trade deals plus extension of tax cuts plus deregulation, buy stocks. That's what he said. Well, and I think removal of the AI diffusion role was an important thing. It's nuanced. It's not as carte blanche as it was before

in terms of like, oh, you can buy the entire market and it's really easy. It's gonna be much more nuanced, but a step in the right direction from a trade deal perspective, and then again, from a regulatory perspective, like you've seen it at the margin with financials, but then to see that AI diffusion rule now pending

what it's replaced with is very important. Yeah, it's gonna be replaced, right. But I think is a strong signal to markets. Within the nuance, where do I really wanna lean into right now, if anywhere is worth actually leaning into? Yeah. Well, I think software, I think it's a really interesting spot and that it still is pretty

under-owned. Like, no one's really gone back to that space from like a hedge fund perspective in terms of positioning. And it's still, you know, relatively attractive valuation, especially relative to semiconductors, which have a lot more tariff exposure, obviously. And I mean, just think about the earnings results that we've gotten from a lot of the hyperscalers over the past couple of weeks that are,

you know, not only continuing to spend on AI, but actually starting to show, you know, green shoots of monetization of that in ROI to a certain extent as well. We've had a pretty good conversation. We probably talked about it the last time you were here, and it doesn't seem to be fading this US exceptionalism trade

Whether money is going to continue flowing out of the US towards better opportunities that are perceived to be Elsewhere like Europe. I mean, how do you see that here? Yeah, I don't remember if we talked about this last time Like I think there's an argument to be made from a portfolio construction standpoint that it makes sense to have assets in your portfolio that are not only US dollar denominated. That's not calling for the end of US exceptionalism. It's just thinking from a smart portfolio construction standpoint. That's really because starting place matters in terms of the dollar, and it was overvalued on various different metrics.

We're not calling for the swift depreciation, but over the longer term, like thinking of that getting back to fair value and having other assets and other currencies is just a good, you know, prudent use of capital. Europe is on your list. So is Japan. Why did you pick Japan?

Japan's just in a different place than it has been over the past 20, 25 years, right? I think the one thing that's a net negative for Japan is that their earnings are gonna be hit more negatively from a stronger yen than if you look at like euro. So for the yen, if you see a 10% appreciation, you usually see like a 5% hit to earnings in Japan, whereas in Europe, that's more like a 2% hit.

So there's that, but I think, they're first in line for trade talks. You're really seeing that corporate reform play out. You're seeing buybacks up over 100% year to date. So you're really just starting to see green shoots in terms of that economy. All right. It's good to talk to you again. Thanks for coming by.

Thank you. That's Abby Yoder, JP Morgan Private Bank. Up next, we track the biggest movers as we head into the close. We go back to Christina Partzanevalos for that. We've got drug stocks tumbling on reports President Trump is about to tackle Medicare prices. What his executive order could mean for your medicine cabinet when we return. We have some breaking news out of Washington.

Our Eamon Javers has the story not related to trade but taxes. Eamon. Yeah, that's right Scott. There was this report earlier from Punchbowl News that the president had been speaking to Speaker Johnson and encouraging him to raise the highest tax rate in this new tax bill that they're working on. Now some confirmation here from a source familiar with the president's thinking to CNBC saying that the president is considering allowing the rate on individuals making $2.5 million or more to revert from 37% to the

pre-2017 rate of 39.6%. They're saying this will help pay for massive middle and working class tax cuts and protect Medicaid. But the headline here, Scott, will be that the president is now arguing in favor of raising that top tax rate, at least for people over $2.5 million. And that is an unusual thing for a Republican officeholder to do. In this populist conservative economic era, though, it's not unusual.

This is a new Republican party that sees itself very much as a working class party that's driving results in that area. They don't necessarily see those very, very high end people as their political base anymore, Scott. Yeah. Paging Grover Norquist, right? I mean, it's only a matter of time before we hear from him. His hair is falling out somewhere in Washington, D.C. right now.

In all seriousness though, this is the same conversation, correct, that was being had around a million dollars initially that has now been raised to two and a half. Am I reading that correctly? I think that's the fair read. They're talking about the rate now for those making 2.5 million or more, it's going to revert from 37 under this new discussion to 39.6. That's an increase, obviously not a huge increase, but it is an increase.

And for a Republican president to be talking about a tax increase on anybody, you know, is unusual. But clearly this administration is going to prioritize, you know, working in middle-class Americans, Medicaid, benefits like that, over tax rates for the super wealthy, over $2 million. I mean, it's just untenable in terms of the conversation where it is right now about the deficit too. So we need to think about all of that in context here as well. Eamon thank you very much. And Scott last thought it makes you wonder about carried interest and some of these other loopholes that you know Wall Street's been able to protect over the years.

Are some of those sacred cows now a little bit less sacred in this debate as we go forward. Yeah, well I mean the ball is matriculating down the field too in terms of where they're going to come up with this final tax policy and it could have a lot of changes between now and then. I appreciate the latest from you, Eamon. Thank you. Eamon Javer's in our newsroom in D.C. Still ahead, what to watch for when Affirm reports results top of the hour.

We're back after this. All right, coming up next, Mike Santoli and Bob Pizzani help us break down these final when Affirm reports results top of the hour. We're back after this. All right, coming up next, Mike Santoli and Bob Pizzani help us break down these final moments of the trading day. We'll do the Market Zone next. We're now in the Closing Bell Market Zone. CNBC Senior Markets commentator Mike Santoli and Senior Markets correspondent Bob Pizzani are both here to break down these crucial moments

of the trading day Bob I'm gonna begin with you. I think some people know maybe not everybody tomorrow will be your final day on the air every day For us I'm saying this to you now because I won't be here with you tomorrow And I just want you to know that you've made such a meaningful contribution want you to know that you've made such a meaningful contribution, meaningful, a mark on this institution, the New York Stock Exchange, on our great company, and most importantly, to you, the viewers, to the viewers, the investing community out there, for what you've taught

us and them over the years. Thank you, Scott. I really appreciate it. 35 years with CNBC. I feel like the last of the Mohicans here. I'm the last one that was still on the air in the first year. So it's been an achievement. I have never thought of going anywhere else. There's nothing like CNBC. I've had offers, we've all had offers. Never once have I thought of going anywhere else. I've never thought of any place where congenial to be at CNBC. The NYSC, even though I don't work here for

them, it's like a home to me. And there's nothing better than that. And there's nothing better than trying to educate people about the markets and long-term investing. That was why CNBC was created, to find a home for people that were interested in long-term investing. And I think that's what we all turned out to be.

And the important thing is, you and me, the three of us, we're in the dreams business. We're in the business of helping people realize a healthy retirement, putting their kids through college. And that's much more important than just saying, oh, we're a bunch of TV reporters talking about the stock market. That's the way I view my role,

and I know that's the way you guys view your roles. Yeah, well, that's why people like all of us have looked up to you from time to time throughout the years to learn more about the markets, myself included. Here is a young reporter on the floor shadowing you to learn from the best. What makes this place tick? What makes these markets go? That's the kind of stuff that your legacy will leave behind. Well thank you and watching you expand and grow, it's just been a joy. Being around 35 years you get to watch people's careers grow. He, Barron's, when I was reading you and you were

commenting on the markets for all of those years and look how you've become the powerhouse here at CNBC. It makes me feel proud. I feel like the kids I all watched grew up and they're even better than I ever was. It makes me feel good. Let's talk about the markets because they've come a long way back, right? And we continue to move on any headline we get on the trade front, Bob. What are your observations here, as we all try and make sense

about where we're going from here? Well, we have a trade deal today, but it's a 10% deal, and that's not nothing. So, and that's our best ally at this point. So if you've got a trade deal today, but it's a 10% deal. And that's not nothing. And that's our best ally at this point. So if you've got a trade deal of 10% on your best ally, what happens to everybody else? Japan is next, and theirs is going to be more complicated. They want a whole tariff discussion, not just an individual one like here. And I think that's going to be a little more difficult.

We have no idea where China's going. We have this headline from the Post citing sources saying that the President may be willing to cut tariffs. So apparently, he said he's not cutting China tariffs. Now apparently it's on the table. So the problem that the markets have is we're always one tweet away from a new movement in the stock market. And I think that's what makes it especially difficult. Right. And reality changes depending on the level we're at right at 5100 just whispers of the potential for looking for deals on the S&P 500 was enough right you're able to burn up a lot of that fear it gets replaced by

hope today 5600 okay we got a little excited about something on paper this UK deal but it does raise the stakes for China I think that the kind of field position of the markets just slightly trickier obviously it does raise the stakes for China. I think that the kind of field position of the market's just slightly trickier. Obviously, it looks like the low is in, unless something really dramatic happens to the downside. But the NASDAQ 100 comes up and just barely touches its 200-day moving average, and the overall market decides to sag a little bit lower. So I think that's where we're in right now. You might need incrementally more substance to justify where we're going from here.

But as the economy hangs in there though too, so I think that's basically a prerequisite. The other, as we talk about catalysts, that's sort of where we're all going here. Buybacks are back in a big way. There's been a number of data points this week about buybacks picking up. That's a potential catalyst for stocks here too. Yeah, it's by low sell high. Warren Buffett always used to say he didn't understand buybacks when stocks were at new highs.

We had an opportunity in April to amount, do some major buying at this point, and that turned out to be a nice turnaround. You see, I wouldn't say we are roaring back, but it's definitely more stable. I mean, look at big cap tech this month. Microsoft, Broadcom, they're up more than 10%. And I like the fact that industrials have turned around,

GE's a new high, the airlines are looking much better. Double digit gains this month in United and all the other major airlines. So I wouldn't say we're roaring back, but I would say it's definitely on a better footing. And I would just point out that the rally we've had so far in the US markets has at least been Sort of ratified by the fact that the rest of the world equity indexes actually went all the way back to their former highs and are

Outperforming Bitcoin you were talking about earlier risk appetite tell and credit has has gotten a little bit more Comfortable even though it's still a still a little bit less firm than it was right before April 2nd. So it makes sense, we've recovered again, you've burned up a lot of that skepticism, we'll see what takes us from here. Well we're not going to send Pizzani out, I'm not, on a red day. I'll be with CNBC Pro and believe me we have a lot more to say. Yes, we will see a lot more of you, you're not going anywhere. We just won't see as often around this floor where you have certainly become ubiquitous and a fixture here, Bob.

We wish you the best. Thank you. That's all for us.