Closing Bell - Closing Bell: AI Trade Troubles, Tracking Hedge Fund Activity 03/07/25

Episode Date: March 7, 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.

All right, stocks are higher, but there is a semi-headline on the wires right now. And I just want to hedge it. It's reports, so it may not happen. Trump team weighing any oil price cap. If Russia talks progress, what would that mean? Remember, under the sanctions on Russia, because of their invasion of Ukraine, there's a cap on the price that they can legally, legally is the key, sell oil. We're going to be at the Sierra Week Conference in Houston next week, Morgan, Monday and Tuesday.

Huge time for energy. Morgan Hickman Yeah, looking forward to that. And I'll see you at 4pm Eastern on overtime. We've got the CEO of Samsara and a lot more in just an hour. Scott Wobner Can't wait. Closing bell, though, starts right now. Scott Wobner Alright, thanks so much. Welcome to Closing Bell.

I'm Scott Wobner, live from Post9 here at the New York Stock Exchange. This Make or Break Hour begins with this very busy day in the markets. Headlines from Washington and right here in New York whipping stocks around yet again. Here is the major average picture and where we stand with 60 to go in regulation. Word from the president that reciprocal tariffs could come earlier than expected sending stocks to their lows. However, remarks midday by Fed Chair Powell changing the tone that's how we currently look we're green across the board we're going to talk to our

experts about all of that coming up some standouts today include Broadcom rising after its own earnings Nvidia is trying to stay positive to that stock believe it or not wiping out a trillion dollars in market cap from its early year highs just back in January banks they're mostly weaker yet again they have been we'll watch those today. They remain in the red. Bitcoins lower today. Bit of turbulent trade in its own right.

On that note, we're also expecting the president to speak at the White House today. The Digital Asset Summit will take you there live for that. It does take us to our talk of the day. The uncertain road ahead for stocks. Let's get the view of our panel today. Stephanie Link, High Towers Chief Investment Strategist and Portfolio Manager.

Ed Yardenny is the President of Yardenny Research. Young Yuma is with BMO Wealth Management. Our own Steve Leesman is our Senior Economics Correspondent. And Steve, I'm going to begin with you because I feel like we got a Fed Chair bounce today. And what do you think it was specifically that he said here in New York that seemed, certainly seemed seemed to calm markets. I think it was a generally

dovish take modestly dovish. See talked about the idea that if inflation doesn't behave well we can hold rates and if we have an unexpected weekend in the labor market we can cut rates didn't talk about raising rates but overall Scott listen to what he said here when he talks about a generally and very patient approach from the Fed. Inflation can be volatile month to month, and we do not overreact to one or two readings that are higher or lower than anticipated.

As we parse the incoming information, we are focused on separating the signal from the noise as the outlook evolves. We do not need to be in a hurry, and we are focused on separating the signal from the noise as the outlook evolves. We do not need to be in a hurry, and we are well positioned to wait for greater clarity. Scott, obviously there's a lot of information to come. He talked about the idea of thinking about all the policy changes to administration as a whole, not just one. Talked about the idea that tariffs are really something that generally pass through and ultimately was very kind of not alarmed by what's been happening. You could see what

happened Scott. There was no change in the outlook for the Fed funds future so we kind of affirmed the market pricing for three cuts this year. Stay with me Steve. Let's bring in everybody else too. I mean, Steph, it did not in any way sound like somebody who was all wound up about either frankly the state of the economy nor the tariff impact yet. Yet. I think we were looking for an excuse to bounce to be honest with you. We're way oversold. We all know about the uncertainties.

We all know we're in a growth slowdown. We've been talking about a growth slowdown to expect in January just simply because we don't have the fiscal tailwinds that we had from the prior administration. Obviously, we're all concerned about tariffs on, off, on, off. That's kind of hard and a headache to be honest with you, but we also don't know about inflation. We also don't know about the Fed. So the question is, how low do we go in GDP? We were growing 3% last year. Do we go negative or do we go one and a half two percent?

I'm in the camp we go one and a half two percent because there still are a lot of tailwinds in the economy I look at the consumer and I think lower rates helps them lower gasoline prices helps them jobs today We're not horrible whisper numbers were 40 to 50 thousand 151 It's slowing of course we're expecting that private jobs a hundred and forty thousand I was very encouraged about wages at 4% and And so to me the consumer is hanging in that's the biggest part of our economy I'm still in the belief we have a manufacturing Renaissance as well Scott We're not we haven't even scratched the surface

in terms of onshore, reshore, and data centers. And you know I've been buying the infrastructure data center companies because they've gotten slammed. So I've been looking for opportunity. I had a little extra cash in the beginning of the week. I am deploying it. I deployed a bunch today. I know you have, and I'll get to that in a minute.

But Ed Yardeni, the price action today, interesting. Do you think it was the Fed chair that turned this market? Yeah, it was nice to have a voice of reason and calm as opposed to all the noise to signal that we're seeing. The noise to signal ratio has really gone off the charts. I think the markets are trying their best to kind of find an island of calm and reasonableness, and I think that's what we got today from the Fed chair. And I think his assessment of the economy was right on.

I think the economy is actually going to turn out to be quite resilient. I mean, look, over the past three years, it put up with the tightening of monetary policy and didn't have a recession. And now I think it's going to be challenged and tested again by all this tariff turmoil. But I think at the end of the day, a lot of this is going to be negotiated away. The problem is negotiations should be behind closed doors where you can't hear all the noise and shouting. You just want them to come out and say, we've got a deal.

And so it's messy, but I think we're all gonna start getting used to the fact that it's gonna continue to be messy. It might. And Young Yu, that's a good point that Ed Yardeni makes. This could remain messy for a while. So how are investors supposed to navigate that? Yes, definitely.

It's still a high uncertainty, high disruption. It's certainly the terrorists that are Yes, definitely. It's still a high uncertainty, high disruption. It's certainly the terrorists that are ongoing, tariff concerns are ongoing, but also doze, spending cuts and layoffs that are also a disruptive force in the economy now. How do you navigate this? I think the first thing is to be patient and not try to chase bounces when they happen. We do think that the market will gradually stabilize, but it could take some time because we have a timing mismatch between the disruptions that are taking place in the here and now versus when the Fed might start cutting rates by mid-year and some of that benefit might

come into play in the near term. We just have to face some of the uncertainty that remains and looking for opportunities, but I think being patient with opportunities as well is the way to go. Steve, you know, there's been conversation in the market as to whether there is a so-called Trump put, whether there's enough upset at some point in stocks to sway the administration away from some policies in some form or fashion. Now, the Treasury Secretary on our network today said it's not the case. What I'm wondering from you is since you took what the Fed chair had to say today as dovish, whether you think the Fed put is alive and well, that if the economy does weaken, they

would err on the side of doing something because of his view on tariffs, which he thinks are maybe a one-time cost increase, at least on the baseline according to what he talked about in the textbook, so to speak. Yeah, I mean, that's exactly the way I think Scott the market is taking this. When he said that, hey, consumer spending looks like it could be a little bit weaker here, it showed that his concern is more on the growth side than the inflation side. But you don't want to take that bet too far because the issue you're going to have is if there are tariffs and there's an expectation of tariffs, they're going to feed into the

price index. Whether they were a one-time event or another or something that lasts a little longer, the Fed's going to have to take some time to figure that out. And Powell indeed did mention, well, if you have retaliation, this goes on for a while, it changes the calculus. And one thing the Fed is gonna do, and I think we're all gonna start doing, is when these tariffs start to feed into the CPI,

the key is gonna be looking at non-tariff or adjacent goods to see if they went up as well, to see if the tariff issue is spreading into broader inflation. But that's a calculus the Fed has to make and something that Powell said will take some time. So you have to be a little careful here about reading too much dovish information into what the Fed chair is saying. The tough part Steph, I suppose, for investors is trying to figure out when this so-called detox period that the Treasury Secretary also talked about this morning on Squawk Box actually

ends. Also the fact that the administration has been telling investors that there's going to be some transition period, whether it was Musk with the temporary hardship comment in October, whether it was the president himself this week talking about a quote little disturbance, and then this today, this morning on this very network from Treasury Secretary Scott Besson. Listen. There's going to be a natural adjustment as we move away from public spending to private spending.

The market and the economy have just become hooked. We've become addicted to this government spending, and there's going to be a detox period. What did you make of that comment? What do you think it means for how people like you, who are running real money portfolios and trying to be a chief investment strategist for their firm, are supposed to do? What do you do with that?

It's hard, but I actually agree with it. That's why I mentioned the jobs report number today with the private payroll growth of 140,000. That's actually kind of consistent with what we've been seeing. It's the government side we know that's gonna slow down. So you actually have to look at the quality in my mind of the quality of the job market and really parse through it.

And so if the private market and they're still hiring, that's a good thing. And that actually feeds back into the confidence that companies have. And I don't think they've lost the confidence. Maybe it's shaken up a little bit, but I don't see anyone cutting back on CapEx. And I'm not talking about the hyperscalers.

I'm talking about across the board. So what I'm trying to do, Scott, I don't know when we're gonna bottom. I don't know if I'm gonna get the best price, but I'm trying to leg in to companies that had good earnings, and we just got fourth quarter earnings, they were quite good,

but some of the stocks are down substantially. And so what I'm trying to do is I go back, do my homework, I look where the valuations are, and I'm nibbling, and I have enough cash to do that, because I do think in the long term, when we do bounce, the companies that have the very strongest fundamentals and the good earnings, they will be rewarded.

Okay, like Wells Fargo. Yeah. Like Broadcom. Like Gap. Three stocks that you just bought more of. Yeah, and I bought more, I bought Wells Fargo earlier in the week and then again today because it was down 5% for like no reason.

Miserable week. Well, I don't know for no reason. I mean, it's been a miserable week for the banks. It's been a miserable week, but they were really one of the leaders up until this week, right? So they're pulling back, but I still have a lot of confidence in this special situation story of cost-cutting asset cap lift and also the net interest income story, which I still believe that we're going to see in this year, 2025, and not a lot of people are talking about it, but the management talked about it bottoming sometime this year, first quarter, maybe second quarter.

And that's 58% of their total revenues. And at 1.4 times book value for best in class, good management team, executing well, to me that's a no-brainer. So Ed Yardeni, this was a market, I think accurately put by the Treasury Secretary today on this network, that was hooked on fiscal and monetary policy. We've been talking about monetary policy since 2008. We just adjusted and we're still adjusting to this new and more normal environment. How long does this quote unquote detox period take for the market to get used to this new world? Well, I'd like to just shift the focus a little bit to the

looking at the global impact so far of Trump 2.0. We just saw that the Germans have decided that they're going to spend a lot more money and not just on defense. We just heard this week that the Chinese government intends to stimulate and provide more initiative, more reasons for the consumer to spend over there. So I think there's some actually positive implications of Trump 2.0 on a global basis. And that's why I think we're seeing that at least on a short-term basis, other markets are actually outperforming the US, which is maybe why the US is underperforming is we've seen the weaker dollar, we've seen a stronger euro.

Investors clearly are looking now at the global situation. And I think the message is actually a pretty positive one for the global economy and for some of these stock markets that have rallied. I don't know that we're that hooked on government spending. I think Argentina demonstrated that if you do take an axe to some areas of government spending it's amazing how quickly the private sector responds positively to that. So I think that's what the administration's betting on and I wouldn't necessarily bet against that.

Young Yu, do you think we have this period of uncertainty if a detox needs to be had and that your job is going to be made more difficult trying to navigate the timeframe of how long it takes to normalize. Yeah, I think it's a period of adjustment. I'm not sure I specifically ascribe to the word detox, but I do think there's gonna be an adjustment period.

Some areas of spending are gonna be cut back. Some areas of employment are gonna be cut back, and it's gonna take a while to fill that practical void that's there. But if we look at the markets reaction I do think by mid year the market can be racking to a fed that's back on track to cut rates. Tax

cuts that are in line to. To happen later in the year so I think there's some benefits that come later in the year but in the meantime we have a mismatch I do think we'll see some weakening in the labor market even though the headline.

Numbers were decent in this jobs report if you look on the hood temporary jobs were down. The In the meantime, we have a mismatch. I do think we'll see some weakening in the labor market, even though the headline numbers were decent in this jobs report. If you look around the hood, temporary jobs were down. The number of underemployed were up. And yesterday we also saw layoff announcements spiking a lot higher. So I think we'll see some softness in the labor market, but that will, of course, spur the Fed to start cutting interest rates perhaps more quickly than people were anticipating. Steve, do you think the initial reaction from the Fed chair when he got the numbers,

and I think he gets them you know better than me a little bit before everybody else does, that it was a sigh of relief that you know they were braced for something maybe a little worse, and even though it was a miss it wasn't all that bad at all? Yeah, but a temporary one Scott. I mean I think one of the things that we're all learning is the extent to which federal government spending permeates a lot of areas of the economy beyond just federal government employment right. So we've talked about this idea of there being private contractors that do government business. There's federal spending in local government hiring.

All kinds of places where this exists. And just one thing about this detox period, some of it makes a lot of sense. If you reduce federal spending and you end up reducing interest rates, you can create a powerful response in the private sector. But the tariff idea of reshoring, with all due respect to my very good friend

and colleague Stephanie, is that it's a bit on the come in the sense that you can move to protect existing industries. I don't know that you can move to bring industries back by creating tariff walls. Are we going to bring the textile business back? Are we going to bring a lot of these businesses back to the United States based upon a 25% tariff? I have my doubts about that. And if that's a big part of the plan of the administration and the economic outlook, that's the part I would be a little more skeptical about. We're already seeing it though, Steve. We're already seeing massive movement around the

world. Everyone has been leaving China over the last several years, and they are moving here to the United States, but they also moved to Mexico and Canada, thinking that was safe, obviously. They moved to Mexico and Vietnam and Thailand. I understand, but they are going all around the world. They're going to India. That's why I'm so bullish on India,

but you talk to companies that are making the data centers or that are part of the grid restructuring or part of the power, and they are all seeing tremendous backlog. Backlogs we have not seen in decades. And so that is why I am bullish. No, I'm not saying, though, that the companies are going because of tariffs, they're going to come here. That's the intent of the administration. I'm not saying that that's going to happen.

But the companies got so burned during COVID, having so much exposure elsewhere, particularly China, that they actually made a plan to diversify around the globe. I mean, Steve, that's kind of the game-changer scenario, as I guess the Fed would view it. That is to the heart of the one-time price increase versus changing the story on the longer-term inflation expectations, which the chair talked about the difference between the two, which would obviously have a greater impact over the long-term, no question, towards

monetary policy. My bigger problem with that scenario, Scott, and I'm not saying it's wrong, and obviously I hope it's right, you know, that people can bring production back to the United States and that it's also cost-effective and profitable for these companies. My problem with Stephanie's example there is that part of the reshoring was nearshoring into what they thought was a relatively stable North American supply chain. And if these tariffs go into place, I guess there's two different sets of tariffs.

There's the tariffs that are going to be the putting them into equalization tariffs, as well as the ones on Canada and Mexico. If those go into place, you've raised the cost of the North American supply chain by 25%. And that could mean you've raised the cost of U.S. production by that same amount because part of U.S. production uses essential parts of Canada and Mexico. So that's my concern. And I hope it works.

I just have my doubts about the idea of reshoring into something that you thought was stable. Well, you do have to consider though, don't you Steve, the idea of artificial intelligence and the fact that technology in and of itself and this really transformational technology is deflationary. Yes, absolutely. But if you think about jobs though, which is what Lutnick was talking about yesterday on our air, he talked about robots. Now robots, as I understand it, they can be very productive, but it's not necessarily

a job for or massive jobs program through robots and automation. This gets to a whole issue, Scott, which is another day. But to me, the bigger issue when it comes to US jobs has never really been the trade story as much as it's been the automation story. And that's where we're going to go in this country. It'll be interesting to see where the jobs come from. I'm not against these ideas.

I'm hopeful that they could work. I'm just a little bit skeptical of this idea that all of a sudden businesses are going to make decisions they could have made previously, and now they're going to all of a sudden decide that it's profitable to do that kind of work in the United States. No, your points are well made. I mean, and look, they may want you to believe that you can have your cake and eat it too. You can bring all of this work back to the U.S. and even in a fast changing world through

technological advances that you can still maintain or even increase the level of employment in this country, that will remain to be seen and we won't get those answers for a long time. Let me just get to a couple more things before we have to wrap it up. Technology, speaking of, and AI, speaking of. Nvidia has lost a trillion dollars in market cap almost since its record high at the beginning of January. Young Yu, what's going on with tech?

Nasdaq is leading today because it's been down a lot and some more so than some of the others have been. What about that trade? Well, we still like tech for the medium term. Certainly tech is going to be the more volatile area. Trying to project the trends outward is a difficult proposition. A trillion dollars for Nvidia is a lot to lose, right? That's real money to anyone. So, you know, I think there are going to be more trends that play out favorably for technology than unfavorably. So I think you want

to lean into technology overall as people are deploying capital, similar to what Stephanie said. I do think technology should be part of that. But betting too heavily on any one company among these very fast changing trends, I think is something probably you want to leave to the professionals and really look to diversify among the technology space. Ed, what's the deal with this trade? How do you feel about it right now? Well, I feel like we've definitely seen some of these stocks go on sale. They're definitely cheaper and I think they've got the earnings to make investors have a

good look at them. My view is that we've got a shortage of labor in the United States and around the world, particularly skilled labor. And Scott, I agree with your observation that we're going to see a lot of automation, a lot of robotics and humanoid robots and manufacturing. I mean, you know, we keep talking about bringing all these companies back to increase employment, but the unemployment rate is 4.1%. So we really don't actually have all the people out there that need jobs. And, oh, I got, sorry about that. So, you know, put it all together and I think the productivity numbers are going

to continue to be better than expected over the second half of the decade. Ed, you tell them you'll call them back. You're almost done. I almost let you go. Don't worry. All right? We'll just be a second. Thank you.

Steph, how about that? that I mean you'd want more broadcom you put your money where your mouth is I totally get it but there's been some real upset in that trade oh yeah absolutely I mean even after the move today it's still down 20% but you know it's interesting the multiple on Broadcom has gone from 34 times down to

28 times not cheap by any means but it's coming down and numbers are actually going higher up about 7% after the quarter. A beat, a raise, 300% increase in gross margins year over year, new ASIC customers. I think all the things are going well for this company. They had a better quarter than Nvidia and that is why I was adding to it.

And I think you wanna just be selective. Snowflake is also on my list next week to take a look to buy. Okay good stuff folks we're gonna leave it there. I so very much appreciate everybody being part of that conversation helping us understand all the events of not only this week but this fast changing day. Thank you Steph of course thank you. Ed Young You, Steve Leesman we'll see you soon everybody. We still are awaiting by the way President Trump's speech at the White House today on the digital assets summit. Mackenzie Segalis is joining us now with what investors should expect to hear in just a bit. Mackenzie?

Hey, Scott. So we just heard from White House AI and cryptos art, David Sacks, and remarks that give investors fresh hope that the government is open to a crypto buying strategy under budget neutral conditions. If the Secretary of the Treasury or the Secretary of Commerce can come up with a budget neutral way to acquire more, then they are authorized, they don't have to, but they're authorized to develop those strategies. Sachs also confirmed that the government plans to enlist a cutting-edge custodian to hold its crypto assets. When asked whether Coinbase or another

major exchange was in the running, he emphasized that the U.S. is looking for a high-tech firm specializing in custody. We're now about 90 minutes into the first ever White House crypto summit where the Treasury Secretary, the President, and top industry leaders are discussing next steps. Earlier, we heard from Scott Bessent, who underscored the administration's priority of bringing the industry onshore and establishing best practices and regulations. We know that a lot of people in that room today want stable coin and market infrastructure bills passed into law. And then as you said, Scott, President Trump is expected to speak any moment now. We'll be

monitoring that for any details on this new reserve. All right. You'll let us know. Mackenzie, thank you. Mackenzie Segalos on the case for us there. Let's send it now to Christina Parts of Nevalos for a look at the biggest names moving into this Friday close. Hi Christina. Hi Scott. Well, let's take a look at the deal of the day. Walgreens is ending a nearly 100 year run as a public company.

The drugstore chain announced that it's taking a buyout and going private. The $10 billion deal with Sycamore Partners is expected to close in the fourth quarter of this year. Shares of Walgreens Boots Alliance are up over 7% right now. And tariff troubles hitting Costco. The wholesale company's CEO said that although the impact is difficult to forecast right now, tariff implications specifically for groceries make margins quote much tighter. Costco also reporting mixed earnings results with profit falling short of expectations.

Although unfavorable exchange rates did play a role, the stock, as you can see on your screen, down over 8%. Scott? All righty, Christina. Thank you, Christina Parts and Evelas. We're just getting started here. Up next, been a rough week as we said for tech. Now Deepwater's Gene Munster is going to join us.

He'll tell us how he's navigating all of it right now. Tell us what he thinks is next for that AI trade. We're live at the New York Stock Exchange. You're watching Closing Bell on CNBC. ["Crossing the Borders"] I told you plenty of times, Tech's been one of the worst performers this week with the Nasdaq breaking some key support levels along the way.

For more on where the space is likely to trade, let's bring in Deepwater's Gene Munster. Knows the space pretty well, I'd say. What do you make of all this? Scott, I make of this as a first disconnect in two years between the fundamentals of AI and the trading, and the fundamentals continue to be strong if you look at What Nvidia said what Broadcom said? Marvell down big this week on some uncertainty about where Amazon was going to spend a lot of money on AI And so from the highest level I always come back to where I've been as a tech investor

It's just the fundamentals and the fundamentals of these company remain strong. And I'm out here with a prediction that we're going to have two good years left going up into bullish years. It's going to end in a spectacular bursting of a bubble. And what I think of it when I see this, it shakes my confidence, but ultimately if I focus on the fundamentals I continue to believe that this is, this trade is going to play out. One last piece, you've enumerated this all week, Scott, but just as a reminder is that this is common, these pullbacks, 12 of them from 95 to 2000 with dot com. This is the second time we've had over the last couple of years.

So I put this in the context of this is actually, I view this as kind of a healthy reset of expectations. I don't think anybody would argue with you at all that the fundamentals remain strong. It simply becomes a question of what you are willing to pay for those fundamentals. Even if so strong, if let's say revenue growth is not as strong as it was, what should you pay for it relative to what you were paying before? Fundamental question about investing, correct? Absolutely, and you hit it right on the head,

is this what is the ultimate growth rate here? And when we think about, again, I'm given a broader perspective on the AI trade, we think that the growth rates are gonna be higher for longer. And so let's just look at Nvidia as an example. Next year, the street's looking for just over 20% revenue growth, down from like 80% in calendar 25,

down to mid-20% in calendar 26. I think that number can be meaningfully higher, 35%, 40%. And it seems a little bit out of touch with reality, those kind of expectations, but if we're right on that, I think that these stocks will move higher. And just one of the reasons, where does that confidence come from, is that if you take some of Jensen's comments that he had on the last quarter, about this 100 to a million

X more compute needed to get to reasoning and advanced reasoning AI. And as we went out and talked to people who are building these, their companies in our portfolio, private companies, public companies, it's pretty clear he's onto something. And ultimately, if that's the case, and this is gonna, I think, surprise some people, is I think that Nvidia's, some of its growth

could potentially accelerate early next year relative to the back half of 25. Well, we said nearly a trillion dollars in market cap wiped out since the beginning of the year or near so when the stock did hit its high. Let's talk about a stock that you've been so closely identified with over the last handful of years. It's Apple, obviously, from your prior life, obviously, too. The knock on Apple is that it trades at a premium multiple for non-premium fundamentals. You just laid out the case that the fundamentals remain strong.

Apple trades last I checked north of 30 times its forward earnings. China revenues are 20%. Components that are loaded into all of these devices come from overseas where we've been talking about tariffs every single day this week and will be for the foreseeable future. Can you make the case that Apple deserves, I'll use the word deserves, to trade north of 30 times earnings

in the face of what I just described? I think the company can trade in that low 30s. And then as the years advance, I think the numbers will ultimately be higher. And that's my case is that I think that the street numbers are too low. If you look at the iPhone growth numbers for fiscal 25, the streets looking for 1%. I think that number could be three, four or 5%. They step up for fiscal 26. So as we advance through the

year, there's going to be more focus on the out year number, but it steps up to eight percent. I think that that's probably the right number. And so I think as a starting point making the case for the multiples, I believe that there is upside to the numbers. Where does that come from? Yeah, I think ultimately it's, I think they're going to find a way to get these numbers higher off this big upgrade pool a couple years ago. Let me ask you one last question before I let you go and it's about Tesla, which is near a 50% drawdown from its high.

As long as Mr. Musk remains as entrenched in this administration and as politically polarizing as he clearly has become. Does this stock recover? Is it a game changer for how you would view the trajectory of the chart if all things remain the same and he remains as politically active and activated as he has? Well, I think the near term, the stock is going lower. And I think this is probably the one company where I'm at the most odds with where the

street consensus is. Who knows what the whisper is. But I think that probably revenue is going to be down 5% next year. The street's looking forward to be up about 10, 12% right now. And I think a lot of it's driven by what you talked about. And despite this very dire view over the next quarter, as these numbers get reset, stock goes lower on that. I still believe this is the best position company comes to physical AI.

This is the trophy after generative AI. When we get to everything with autonomous vehicles, robotics, full self-driving, I think that the company is in a great place there. So Scott, as a Tesla investor, I'm bracing because I don't want to trade around this, but I'm holding it with full expectations that it's going lower as these numbers reset. Mark your calendars for the first or second of April when those delivery numbers come out. That's probably D-Day. All right. Gene, we'll leave it there. Appreciate

your time and your insight as always. That's Gene Munster of Deepwater joining us. We'll see you soon. Up next, Citi's Mythra Warriors back breaking down how some of the biggest investors are positioning themselves right now. We're back on the bell right

after this. It's been a rough stretch for stocks. The S&P heading for its worst week since September for a look at how the biggest investors are positioned right now. Let's welcome in Mithra Warrior. She is Citi's North America head of capital introduction right here with us back at PostNight.

It's nice to see you again. Great to be back. I mean, how would you describe sort of the feeling in the hedge fund world, the big money? What are they doing? So coming into 2025, there's a lot of exuberance. 2024 was a good year. Now there's a risk off tone, certainly from our clients. Our PB data shows that coming into February, up until mid-February,

gross exposures were at a two-year high. Since then, they've come down pretty significantly, but net exposures have come down even more. Because of uncertainty, because of tariffs. I mean, as you said, it was a tremendous amount of optimism after the election. And at least today, it feels like it's dissipated because of all of the uncertainty. What do you think?

This is certainly a result of the uncertainty and it's a feeling that there's a market that trading strategies do well in. And so there's a lot of hedging. Our stock loan group noted that the last week of February saw the highest short interest year to date, 23% above average. So there's a lot of shorting, there's a lot of hedging happening, and there's a

lot of trading around this uncertainty, which is it's a good environment for hedge funds. Maybe a better word for me would it would have been delayed rather than dissipated because there still is optimism. It's just pushed. Correct. And in the conversation I had yesterday that I had referenced before as well with the former Dallas Fed president talking about the, you know, the animal spirits and doing deals and what people are thinking. It's not no, it's just not now. Correct.

Is that how you think the larger investor community is thinking? Well, and you talked about deals. One of the things that people were really excited about was the IPO environment, the M&A environment. And there was a feeling that there'd be this rush of deals that hasn't yet materialized, and there's, but there's an expectation that it will still come, maybe delayed, not quite dead.

But what does that mean for, you know, sector moves and sector rotations and things like the financials and private equity? Right. Terrible week. Right, I think this is where hedge funds truly have an opportunity to shine. The ability to short, the ability to be nimble, the ability for portfolio construction and sizing.

I mean, areas like biotech, that's why they continue to be interest there for active engagement and active investing, right? Because you can trade around these names. Yeah, I mean, healthcare obviously has been the best performing, or certainly one of them, from the year. What about tech?

Basta, our guest, obviously, it's the hot topic around Wall Street. How do you see it? How are your clients looking at it? So, tech, information technology was one of the most heavily sold sectors in our book that we saw in the last couple weeks, and certainly,

where short interest has been really high. So, tech is an area where people see it as a treating related approach. It's really hard to have a fundamental view on any given name right now. And so people are viewing that if you can be opportunistic and trade around names and trade around news, then that's a way to make money.

When you sat down and I said, hey, we may have to go to the White House for the digital asset summit with the president. There's a lot of interest around that. You said from hedge funds too. Yeah. Tell me more. So I think certainly in the digital asset

and the ETF space and the crypto ETF space, there's involvement because again, if you can find the arbitrage opportunities there, if you can find the relative value opportunities, less of a directional play from hedge funds. But if there's an opportunity to take advantage of the relative value between different assets, then that's certainly an area where we're seeing interest.

We talk about volatility though. Yes. Right, there's been volatility all over the market, need look no further than crypto and Bitcoin. Yes. And I think it's something where hedge funds feel that they have the tight risk management. If you can have the limits, the stop losses, the portfolio controls, then it's a place that you can be active in. What do you make of what the Treasury Secretary said this morning on this network about this detox period that we need to go through as if this is not just going to potentially turn around overnight, that the market might have to go through some uncomfortable period

before it feels better. Yeah. When we speak to our clients, that's the sense that there's going to be no short term cure, no quick fix, and they're gearing in for a long period of volatility. And they feel that portfolio positioning and stock picking and the risk management and the ability to swing gross and net exposure are gonna be really important in this market. Interesting, and last month, you know, if you look at sector breakdowns, you say that energy funds did well in February.

Relatively. Well, relatively speaking, I mean, energy, we're watching that obviously today closely too. Tell me more about that. I think it's a space where people have been under-invested the last few years and it tends to be a very cyclical sector where when there is a lot of macroeconomic uncertainty,

when there's regulatory moves that happen and also when you have geopolitics, that sector is certainly very much in play and so we're seeing people get active in that space. I mean, if energy prices continue to go down though, what is that, then you have to be even more active. You could be a reversal in fortune and sentiment. Right, one of our best performing hedge funds

in the energy space was a long short manager, right? So you're market neutral, so you have the ability to go short as well. It's good to have you here. Great to be back. Thanks so much for being here. That's Mithra Warrior from Citi, North America, head of capital introduction. Just want to check on the markets once again too,

because it's been really a tale of two sessions. What was an early decline as the president was talking about the potential for reciprocal tariffs going in as early as today, perhaps earlier than expected for sure, maybe next Monday or Tuesday, when the Fed chair spoke midday, really had a bit of a calming tone towards the market. Again, talked about the strength in

the economy, the fact that they felt like they could be in no rush when addressing the issue of tariffs. The idea that well if their one-time price increases we don't necessarily have to do anything. It is the longer term inflation expectations that would certainly be a difference maker. Let's go to the White House now, as we think we're gonna hear from the President now at that digital assets summit that I told you about. Let's go there. Thank you very much. Well thank you very much everyone.

Great honor to have you. I know you've all been working very hard and very successfully. And it's a wonderful place, the White House. I want to begin, is Johnny here from World Cup. I want to thank you for this election. And they just had a presentation in the Oval Office, and I thought this was such a beautiful, this is the trophy, this is a big deal.

The World Cup is the biggest sporting event, and Johnny Infantino is my friend for a long time, and during my first term, we worked out a deal to get the World Cup, and then because of lots of interesting things that happened, I ended up being president. When it showed up, I was always disappointed. I wasn't gonna make it.

I was gonna serve eight straight, and said we did it the hard way, but maybe the more important way. So I will be with you as President Gianni. So maybe you could just say a few words and show how beautiful the World Cup trophy is. Thank you. Yeah, sure, please. Yeah. That's a great key. Will you go ahead? I trust you. So this is the new trophy of a new competition for the FIFA Club World Cup.

The 32 best clubs in the world with the absolute best players in the world. For the first time in history, this competition takes place in the FIFA World Cup. And it's a great opportunity to be able to see the world's best players. And I'm sure you'll be able to see the world's best players. And I'm sure you'll be able to see the world's best players. And I'm sure you'll be able to see the world's best players. And I'm sure you'll be able to see the world's best players. And I'm sure you'll be able to see the world's best players.

And I'm sure you'll be able to see the world's best players. And I'm sure you'll be able to see the world's best players. And I'm sure you'll be able to see the world's best players. And I'm sure you'll be able to see the world's best players. And I'm sure you'll be able to see the world's best players. And I'm sure you'll be able to see the world's best players. And I'm sure you'll be able to see the world's best players. And I'm sure you'll be able to see the world's best players.

And I'm sure you'll be able to see the world's best players. And I'm sure you'll be able to see the world's best players. And I'm sure you'll be able to see the world's best players. And I'm sure you'll be able to see the world's best players. And I'm sure you'll be able to see the world's the absolute best players in the world. For the first time in history, this competition takes place in the United States. Opening game on the 14th of June, obviously, in Miami. Final on the 13th of July this year in New York, New Jersey. But it's not that. It's very special because it has a key and because as you can see, if I manage to do that, it's a tricky. It's a...

So this is a trophy. It is a trophy which represents, and that's why I think it's interesting to show this trophy exactly in this form, because it represents the past, but it's also projected to the future. There is no other sports trophy which looks like that. It has engraved the history of the game, soccer or football as we call it, the participating teams of the first edition, the stadiums, beautiful stadiums in 11 cities in the United States of America where this competition will take place. So at the same time past, present and projected to the future. And if I may, President, say another two words, and then I let you work. I would like to congratulate the President

and the administration for the World Cup, the Club World Cup, the World Cup, and the great work done, and also for this initiative that you are speaking about here. If I may add something in this respect, I'm not an expert at all, but FIFA, as you know, is a brand which is globally known, a very strong brand.

The soccer economy in the world is worth around $170 billion a year. 70% of that, Mr. President, is in Europe. So imagine the potential that there is around the world, only in soccer, if we develop. And so FIFA is very, very interested under my presidency to develop the FIFA coin, to do it from here, from America,

and to conquer the 5 billion soccer fans in the world. So if there is anyone here who is interested to team up with FIFA, here we are, together with the United States of America, and we will conquer the world of soccer with the FIFA coin. Thank you. Thank you. That coin may be worth more than FIFA in the end. It could be quite a coin actually. Anyway, thank you Johnny. Great job. I just thought you should see this trophy because it's really, you know, it's the biggest sporting event in the world and we have it here. And we appreciate

being selected. Thank you very much. You do a fantastic job. And welcome to the first-ever White House Digital Asset Summit. I know that many of you have been fighting for years for this, and it's an honor to be with you at the White House. I want to thank the White House AI and Crypto Czar David Sachs, Treasury Secretary. This is David right here, in case you don't know. You know David. And a man who's doing a great job as Secretary of Treasury, Scott Besant, who's right here. Scott, thank you very much. Commerce Secretary Howard Lutnick, wherever you may be, Howard.

Hi, Howard. He's doing some interesting work right now with all that's going on. He's right in the middle of it and doing a great job. Thank you. SBA Administrator Kelly Loeffler. And thank you. SEC Commissioner Hester Pierce. Thank you, Hester.

Acting CFTC Chairman Caroline Pham. House Majority Whip Tom Emmer. Hello, hello, Tom. Representative Brian Stile. Thank you. Brian, thank you very much. Digital Assets Council Director Bo Heinz. Good, Bo.

Great job. And many other distinguished guests. We have a lot of very distinguished people around the table. Some of them will be speaking. I want to thank Marco Rubio also, who's right over there. And we have tremendous people very interested in the subject. And last year, I promised to make America the Bitcoin superpower of the world and the crypto capital of the planet.

And we're taking historic action to deliver on that promise as you know around the table Yesterday I signed an executive order officially creating our strategic Bitcoin reserve and this will be a Virtual Fort Knox for digital gold to be housed within the United States Treasury. That's a big thing The federal government is already among the largest holders of Bitcoin, as you know. Really one of the largest holders in the world, with as many as 200,000 Bitcoin obtained via civil law and various other forms of law, including enforcement actions. These existing holdings will form the foundation of the new reserve. Unfortunately, in recent years, the U.S. government has foolishly sold tens of thousands of additional

Bitcoin that were worth billions and billions of dollars had they not sold them, but they did sell them mostly during the Biden administration. Not a good thing to have done. From this day on, America will follow the rule that every bitcoin knows very well. Never sell your bitcoin. That's a little phrase that they have. I don't know if that's right or not. Who the hell knows, right?

Who knows? Who knows? But so far, it's been right. And well, let's keep it that way. The Treasury and Commerce Departments will also explore new pathways to accumulate additional Bitcoin holdings for the reserve provided it's done at no cost to the taxpayers. We don't want any cost to the taxpayers.

In addition, my order directs federal agencies to conduct an inventory of all crypto assets currently held by the U.S. government and determine how they can be transferred easily to the Treasury. Non-Bitcoin digital assets will be held in a new U.S. digital asset stockpile where they will be managed properly. My administration also is working to end the Federal bureaucracy's war on crypto, which was really going on pretty wildly during Biden until the election came about. About five months before the election he became

a big fan because he heard how many people were in favour of it and how many people love it and respect it, but I guess it didn't work out too well for him. People understood what was going on and paved the way for groundbreaking innovations and institutional finance. Under the Bitcoin administration regulators strong arm banks, I mean they really did, they strong-armed banks into closing the accounts of crypto businesses and entrepreneurs, effectively blocking some money transfers to and from exchanges and they weaponized government against the entire industry.

But I know that feeling also. Maybe better than you do. All of that will soon be over and we are ending Operation Chokepoint 2.0. That's the President, of course, at the White House, digital assets summit underway, where the president did call the United States the Bitcoin capital of the world, the crypto capital of the planet. And we're going to continue to monitor that for you, bring you any other headlines. But probably saw the president flanked by some cabinet members, also MicroStrategy's

Michael Saylor and the Coinbase CEO, Brian Armstrong, there as well. Again, we'll keep our eyes peeled there, bring you anything you need to know. In the meantime, let's do the closing bell market zone now. CNBC senior markets commentator Mike Santoli here to break down the crucial moments of the trading day plus two corners of the market hit hard this week. Leslie Picker on financials, Seema Modi on software names. Michael, I'll begin with you. Maybe it was the Fed chair who just sort of calmed the water a bit. It coincided with him beginning to speak and him essentially saying, you know, conveying some flexibility obviously to not just sort of take any price increases from tariffs as

some kind of a reason to get more hawkish. I do think though the market has been attempting to get to that point of enough for now, not that we've resolved the big issues, but that seven, eight percent down in 12 trading days, which is what it's been for the S&P 500, really has just sort of swiped away a lot of the froth and reset expectations to a fair degree. I don't think that we got some kind of really fat pitch on a technical level that says,

this is a big and enduring low, but a better sign to lift off the lows into the weekend even if it means it's not all over. I mean you didn't want to go and close below the 200 day on the S&P. If you could avoid it you'd rather not do that. And also we do have to reverse back to the highs of July. I mean really going back a well a good distance in time to say that we've had this bit of a reset.

Yeah. If there's been a trade, Leslie, that's been pretty upset, it's been the financials. Tell us more. Oh, yeah. It's been a really ugly week for the banking sector. Fundamentally, though, the banks are intact. In fact, over the last few weeks, we've gotten a slew of mid-quarter updates from bank executives at a variety of conferences, and Piper Sandler sums up the commentary as being modest Q1 guidance changes, no revisions to fool your expectations, encouraging deposit

commentary, customer stability, and hopefulness on the new regulatory regime. The Piper analysts say, quote, taken together despite all the renewed uncertainty, stories are on solid ground at present and there remains the promise of many emerging tailwinds in the coming periods in our view. As for this week's action, they chalk it up to an unwind of the Trump trade from which the sector had previously benefited. However, if some of the investor concerns about the economy really come to fruition, that would of course have a very adverse impact on the banks.

Scott. All right, Leslie, thank you for that. That's Leslie Picker. Let's talk software now with Seema Modi. Tell us what you're seeing. We're watching AppLovin, Scott, because tonight we're expecting an update on which stocks will be added to the S&P 500.

AppLovin has been rumored to be on the list. Citi's trading desk adding that if the software name is not included, shares could continue to fall. It's higher today by 4%, still down 17% for the week. But today the worst performing software name is Samsara, delivering a more conservative fiscal outlook due in part to tariffs. CEO talking about how customers are prioritizing finding ways to bring costs down this year. It follows weak guidance from CrowdStrike and MongoDB, two of the biggest losers this week. And next week the conversation turns to Oracle earnings on

Monday plus that tech CEO meeting at the conversation turns to oracle earnings on Monday plus that tech ceo meeting at the white house which will also begin on Monday Scott all right seem appreciate that thank you that's sema moody we've got about 90 seconds mike notable names to discuss for a minute tesla down 10 percent week to date what's your thought here a little i mean i think you have to be looking at this point for forced liquidation capitulation type metrics just because of the depth of the decline. It's funny that stocks are still moving on the idea that they're going to go into the S&P 500.

Tesla's barely above where it is four and a half years ago when it went into the S&P 500 at that price above 200. So I don't think there's any magic there. I think it's probably helpful big picture to have a lot of the meme-ified mega caps start to roll or how they have rolled and just sort of get that out of the market system. The momentum reversal has been profound. It probably hasn't fully gone back to flat from where we started let's say a few months ago, but it's all kind of helpful. It's building into this

from where we started let's say a few months ago but it's all kind of helpful it's building into this argument that you can make that you know we've sort of taken enough pain in the short term. The issue with perhaps the banks going down though is you want them to get a bid because you don't want it to say that there's something systemic happening that the cross-asset volatility with yields and FX is starting to present the possibility of some kind of infection to the capital markets. I don't see it right now, but you want that not to start. You've been watching credit closely and you've had a little bit... It's wobble.

...widening, it's a little bit. Yeah. The bell's going to take us into the weekend, at least on a green note. That's all good for us. Everybody have a good one. I'll see you on the other side of that in the OT with Morgan and John.