Closing Bell - Closing Bell: Closing Bell: Tariff Anxiety Grips the Market 4/1/25

Episode Date: April 1, 2025

What will tomorrow bring for these markets which are craving some degree of certainty? We discuss with Trivariate’s Adam Parker and Ali Flynn Phillips of Obermeyer Wealth Partners. Plus, Gene Munster from Deepwater Asset Management tells us what is at stake for Tesla as that stock wraps up an ugly quarter. And we saw some big bounces in the consumer space. We drill down on those moves. 

Thanks so much. Welcome to Closing Bell. Scott Wabner live for the Post 9 here at the New York Stock Exchange. This Make or Break Hour begins with tariff anxiety. It's gripping the markets lately. Investors wondering when the uncertainty will end and if tomorrow brings the so-called clearing event leading to an April rebound. We'll ask our experts over this final stretch. Take a look at the scorecard with 60 to go in regulation today. Mostly calm day on Wall Street though. Some selling dowels down about 200. Sectors are split. Discretionary has been leading today

and Tesla is a big reason why. That's not getting a nice bounce. Healthcare has been a drag along with financials which are modestly weaker. They both are as sectors today. It does take us to our talk of the tape. What tomorrow will bring for these markets, which are craving some degree of certainty.

For that, we begin with Meghan Kassella at the White House with the very latest. Meghan. Hey, Scott. So we are slowly learning some details about what's on the table at least for tomorrow. And one new detail that I can bring you now is I was just told by a White House official

that one thing that's under discussion is revoking that de minimis exemption, that trade loophole against China. That's one thing that's under active discussion. Now remember this is a loophole that allows small packages under $800 to come in duty free and without close exemption inspection. I should say this is something Trump tried to do earlier in the term. It's been on a temporary pause. Now I can tell you it is something they are considering announcing tomorrow. But as with all else, Scott, I'm

told that it's fluid just over 24 hours now until that Rose Garden event. And I am told that meetings are ongoing with White House officials. They are still deciding exactly what direction to go in. The piece of concrete information we do have is that all tariffs being announced tomorrow are expected to be effective immediately, so no long lead time for companies to get adjusted. The White House says they've been teasing these for so long that other countries should already be ready for this and know at least somewhat what's coming. But beyond that, I am told that despite some meetings already happening earlier today, discussions are ongoing and they continue to discuss three main options

that we spoke about earlier. One is that blanket, potentially 20% across the board tariff. The next is that multiple tiers of rates countries fall into buckets and there could be a few specific tariff rates for each one. And then the other is the custom rates for each country. So all still on the table. I know there was one meeting earlier today that White House Press secretary Caroline Levitt told us it was between the White House between the president and his trade and tariff team. She said that was where they were perfecting their plans but when I followed up to try to get some details

afterwards Scott I was told there are more meetings this afternoon there will be more meetings tomorrow as well and so nobody and last being us will get those firm details until that 4 p Rose Garden event tomorrow, Scott. All right, it's fluid to say the least, and you'll let us know any details. Megan, thanks so much. That's Megan Casella. Adam Parker's here now, CNBC contributor, of course the head of Trivariate Research. Good to see you.

Welcome back. Great to be here. Biggest debate in the market. Is this a clearing event tomorrow or not? How would you answer that? No. No, I don't think we're gonna get enough clarity to let us move past this this moment. I don't think so. I mean look, I'm still concerned about

April earnings season that a little bit of like the damage is done in terms of you know confidence from the consumer. If you're a CEO of a company, did you deploy capital, what's happening with inventory and cap backs? Like I think there's enough uncertainty where I'm really focused on that first two weeks of April earnings season, do I get any negative pre-releases and or do I get what we all love, which is a stock misses but it doesn't go down.

And that I don't think we've seen a lot of yet where a company guides down and the stock stays flat and then we say, okay, that's the clearing event. I do think that a 5% or plus or minus tariff is in the price for the first half this year. I mean, if you look at the poly market, it's now up at 70%, we're gonna have one, and the market's not reacting that badly to that,

but I think if it starts getting much bigger than that, there's another leg down. So I don't think there could be a one day clearing event, but I don't think we're out in the woods, the bottom is in for the market by any stretch. So you say that the damage is done. I guess my question to you, has enough damage been done to the market?

The S&P's down 10% year to date. NASDAQ has been hit pretty hard. I mean, I'm sorry, the NASDAQ's down year to date 10%. The S&P down about five. I think April I'm sorry, the NASDAQ's down year to date 10%. The S&P down about five. Yeah. I think April earnings could be the bottom, could be the clearing event. If we start seeing a little bit more confidence, then we can start focusing on the next phases, taxes and regulation and other things that got people excited on election night.

The good stuff. All that good stuff. The good stuff, the pro-growth stuff, right? But I think right now, what I mean the damage is on it, in terms of just the Q1 earnings stuff, right? But I think right now, when I mean the damages on it, in terms of just the Q1 earnings and Q2 guidance, I just don't see how that's skewed to the upside. And until I get any evidence that company guides revenue down, stock acts okay, I still think we could have a choppy first 10 days

to 15 days of earnings season. I guess my point is though, isn't that reflected in this market pullback already? In other words, what are they gonna tell us at this point that we don't already know? Well, we're seeing a lot of uncertainty among consumers. They're hesitant to spend. You know, we're not really sure where all this is going. You know, wash, rinse, repeat. I've heard that a thousand times already. I think in the consumer sector, maybe the bouts you're getting today, this

ex Tesla, maybe is a little bit of that. Like some of those stocks have really been killed. But I'm not so sure with financials or tech, or we've seen a big guide down that, you know, is that gives me a lot of confidence that's in the price. I'm really focused on where are relative estimates more achievable in my mind and rank ordering that. I still think healthcare estimates look more achievable. I think demand's been pretty good, pricing's pretty good.

I think we talked about it on your show last week. I think metals look pretty good. If you look at almost every metal, it's up quarter to date, but we haven't seen any upper revisions. So there could be pockets of things to own where I don't think relatively better news is in the price, but broadly, I don't see how, I wanna buy a business where I think that there's downside to the numbers in the next two weeks

What area of the market did you come into the year? pretty bulled up on thinking that this is going to be boom times and You've had to completely rethink the way you are thinking about the market because of the messiness of what we're dealing with, the uncertainty, the pullback in stocks and just this uncertain environment that we found ourselves in, which has surprised, I think, a lot of investors. Not all, but a good number. We've had a good year so far.

Our biggest recommendation over it was healthcare, our biggest underweight discretionary. It's been the second best and the worst. Energy has been the best. I didn't have that on my bingo card. We had it sort of third or fourth. It's so small. The stocks have acted better than the oil price has. So I've been a little surprised by that. We upgraded industrials at the beginning there. They've been an average performer. I thought what we were playing was a little bit of improvement year over year versus easy comps You got a little bit better ISM a little bit better industrial production Maybe the estimates maybe I take a shot at a high quality industrial into earnings I just would love anything where it misses and acts. Okay You know, we haven't been recommending tech, you know, we downgraded the mag 7 early February

So I think we're still okay there the piece we're working on right now is on semiconductors the piece we're working on right now is on semiconductors. Just trying to figure out when is the right time to kind of really get more bullish again. It's a cyclical business and some of the stocks are down a lot and I still believe strongly, which you've accused me of and I always say guilty of charge, as being a bull long term on compute demand. So I think that's an interesting one,

like maybe that's the sector where I get bad April, but I still can buy them. You know, yeah. Those stocks are down a lot. I mean, are they at the push the button point now and buy them? Well, we've seen from the ones that have high inventory, which are really the non AI ones,

Texan, ADI, Microchip, not really, right? We haven't seen those companies really act well. They have really high and growing inventory sales. But I think the other part, it's getting close. It's getting close, and I'd like to think that any side somebody has a squishy guy that's an Axe OK will probably get a little more bullish on adding in April. I mean, April's historically good. You know, I just think-

And we've been down a lot in March. I think the one disconnect that isn't trued up is All those now cast the GDPs and every major firms economists have lowered the GDP some know It's like become like so fashionable now what I mean Atlanta GDP is what you're referring to there like minus three eight I don't know but Morgan Stanley and J. Everyone lowered their numbers from Jan one, right and the earnings have just touched a little bit lower So maybe it doesn't matter, we've talked about the four earnings can come down, the stocks can act okay,

I just haven't seen that. So that's why I'm saying it's gotta be one or the other. Either the earnings come down and the stocks act okay, or the economy gets better, and I think right now it's unlikely to improve. So I think it's a little bit worried into earnings season, focus on healthcare, maybe select industrials, maybe take a shot at some metals.

I still think tech is gonna be skewed to the negative on earnings. But, you know, look, the last 20 times we analyzed, the last 20 times the market went down 10% or more, and what worked in the three months after, and 19 of the 20 times it was tech. Okay, so if you wanna know, if you're bullish now, you gotta say you're buying tech.

That's what I believe is the answer. I wrote about that in our TriVector business last week. Like if you wanna own stocks and you're bullish, it's gotta be something to tech. Well, Nasdaq's green. S&P is like bear hugging 5,600. So we'll watch that. Waiting for a catalyst, yeah.

Yeah, probably a good time to bring in our senior economics reporter Steve Leesman. You stay with us Adam. And I guess Steve the moral of this story is that you know from Adam Parker to Tom Barkin who sat on this desk with us yesterday to just about anybody

else. Nobody really knows what's happening. What's the end game is truly going to be? What the end of the road hit's going to be on the economy? We know Q1 is going to be weak, but that doesn't tell you what the whole year is going to do. No, it doesn't. I was interested listening to Megan's report and I sent her an email, Scott. Let me just set the stage here We are potentially on the verge. This is the day before

What will likely be the largest tax increase? since 1951 maybe 1941 when we were at war if you look at what they're talking about. I'm taking Peter Navarro at its word If you look at what they're talking about, I'm taking Peter Navarro at his word, 600 billion from the reciprocal tariffs, 100 billion from the autos, that's 700. I did the math, that's 2% of GDP and you got to go back to 1951 for this. So when I was listening to Megan, Scott, the question I had was, do they not know or are they not saying? And I get the not saying bit because they're holding it for the president.

But if they don't know at this hour what they're doing the night before, the biggest tax increase in history, I guess that makes me a little bit more nervous. Yeah, but I mean, I could come back at you and say, well, you could take that as kind of a good sign. I don't know. Maybe there's the flex of, well, you could take that as kind of a good sign. I don't know. Maybe there's the flex of remember there will be flexibility. There will be some flexibility. That's what the president said about a week ago or something to that degree.

Maybe there in fact is some flexibility and what looks terrible today doesn't look terrible tomorrow. Right. Until it looks terrible the week from now. I mean what I'm looking for Scott is a plan. A plan that says here's what we're trying to do. Here's the objective. There are thousands of tariffs out there. If you're going to get reciprocal you're going to overload computers. I don't know maybe it's going to be at across-the-board tariff. I guess my point

Scott is that I don't believe the uncertainty ends tomorrow I believe the uncertainty sort of begins in the sense of what we're gonna try to do is we're gonna try to factor all This stuff in we have estimates out there Goldman keeps going up They started off with a very low number and now I think their latest numbers They expect an average tariff to rise by 15%. 15% is point. So that's something they keep raising as we go along.

I'm not sure Scott, we see some of the data today looks a little weak. Look at the ISM data. The prices paid went up because of front running. You had some construction spending that was good today, a bounce back from the cold weather of January. If I look at the GDP chart, Scott, President Trump right now in terms of his imparting of optimism to the market and to forecasters is not only underperforming Biden, he's underperforming himself. Look at how that GDP number shot up in January as a result. After his election, the economy was doing well. And look at where

we are now in our latest rapid update, just responding to Adam. We averaged all 14 forecasts across the street, Goldman, Bank of America, Morgan Morgan Stanley and it's just 0.3 percent So that's a good indication of the change in the outlook now There's some import stuff in there that makes it a little gnarly But ultimately they're looking at one maybe one and a half percent for the year But that goes to the idea of what they've been talking about disturbance to the idea of what they've been talking about, disturbance, detox, that you need to go through what we're going through to get to the place that they believe, that they believe that

they can take us to. I use the example that the Treasury Secretary himself gave. I'm paraphrasing it, of course, because I don't have the direct quote in front of me, but the idea that cheaper television sets should not be the epitome of the American dream that they believe it should be something different and if you have to pay a little bit more for your television today to have a better and higher paying job tomorrow then darn it so be it. Yeah well I think I would leave to the American public to determine what their American dream

is and maybe not tell them. But one of the things that's made for many people the American dream more possible and more achievable has been the ability to import cheaper products from abroad. And to now, of course, that has hurt some people who have lost their jobs. And that's been an issue and I Having read about I don't know several hundred of the comments that were sent to the us tr There is real pain out there from unfair trade practices that do need to be addressed But this idea that we have to have pain to do it

I kind of reject that counterfactual scott because I think it's worth having tried another way which was a more gradual Approach you remember Scott Besson remember what he said He thought this idea of a gradually rising tariff was something that might be useful or an approach That appears to be rejected So both the uncertainty of the policy Scott and and I think the kind of idea that we have to detox from the former economy, which I think by most measures was doing okay. Yes. This conversation could go on because you could literally say yes, by the raw numbers

the economy was doing okay. But it was drunk on fiscal and monetary policy that seemingly had no end, nor did the escalation of the deficit. So in order to deal with one, you're gonna have to harshly deal with the other. You're not just ripping a Band-Aid off, you may be chopping off an arm. It's gonna feel horrible.

It's gonna look bad. But there's no other alternative. To me, the idea that you have to harshly rip it off is something I'm not sure is accurate. Completely agree. I've been talking for a long time about the need to address the debt and the deficit. I'd like to point out that that is Congress's prerogative.

And one of the things that most bugs me about the tariff part, which has nothing to do with the economics of it, is that revenue is the province of the Congress. And now we have the president essentially using loopholes in trade acts to enact one of the biggest tax increases in history. So I think that's troubling from a constitutional standpoint. That's neither here nor there from an economics one, although perhaps the idea that it's presidential edict makes them maybe potentially less permanent. But the idea, yes, we had to address the debt and deficit,

whether or not it has to be done this way through an increase in tariffs, that we don't talk about this a lot, Scott, but tariffs are much more regressive as a tax, much more painful for the poor than they are for the wealthy. Look, even supporters of tariffs now, not gonna mention any names,

were harshly against them for their entire careers for that very reason. So your points well taken. I'm the last guy. I'm the last guy. I just feel like it's time to. I'm the last guy, Scott. I feel like we need to have this conversation because there are two sides to this conversation. It's not a one-sided conversation

and the outcome, frankly, we don't know yet. We're gonna have to see. It's either gonna go okay or it's gonna go very badly. We'll find out. Steve, thanks for helping us debate this topic. Yeah, there is no free trade party. I mean, the Democrats are not really on board. Republicans are on the board.

There's a couple of Republicans who I talked to that kind of agree with me on this, but that's about it. To be continued, Steve, thanks. Steve Leesman, our senior economics correspondent. Let's add in Ali Flynn Phillips of Overmire wealth partners, Adam Parker, of course, still with us. I guess Abby, it just underscores the unknown and the uncertainty that has driven this market crazy

for the last couple of months. Yeah, well, thanks for having me. And there's been a lot of great thoughts today. I mean, I think first and foremost is the real outcome what investors want is having some of the diplomatically negotiated trade agreement. And we're talking about the black and white here

that's something we still really hoping for some sort of compromise. I mean if we think about this in terms of what's happening you can't reword rewire the entire global economy without some sort of unforeseen impact- my colleague

Adam has a great analogy saying it's a little bit like trying to rewire a plane mid flight you may think about in terms of having a great outcome but something's going to break something's to be unforeseen. From our point of view and

going back to in terms of overall investments is we do have to remember is that these companies that we own are run by great management teams that can be able to figure out what to do as this trade framework becomes more transparent. They're really focusing on

high-quality management teams, great companies that can be able to navigate around, particularly as more information comes in light in the next couple weeks. And maybe that's the whole thing. I mean do you do expect that? Do you think you're gonna have more information coming to light in the next few weeks that help you make better investment decisions. Because I'm not so sure that the same CEOs of those same companies that you just referenced are going to have the clarity that you'd maybe like them to have so that you can in fact make better decisions.

Well, two things that we are going to have first and foremost is one thing, and I think the best way to describe this market, it's a knee jerk reaction mark right now. People are knee jerk reaction to any sort of headline that's coming out of Washington which is clearly a barrage. So once we at least have a little bit more in terms of the framework that we're going to figure out in terms of which countries affected which sectors are affected that will allow us to be able to really figure out in terms of which companies to pay attention to. Also kind of once we get past this is we are going to have earnings coming up and earnings will show in terms of who's having strong cash flow, who's been able to maintain their profit margins and you'll actually be able to have some of the companies figure out how

they're going to deal with supply chain disruptions and some of the other things. So that sort of information we do think is coming out in the next couple of weeks, which actually gives us something to analyze as opposed to speculate on. At what point, Adam, do you, as everybody suggests, you know, the market discounts, you know, future, you know, things on the come? I mean, at what point do you say, all right, I know all this bad stuff, but I also know that the Republicans hold the Congress, okay? The president is more than likely, barring a surprise,

he's gonna get the tax extension that he wants and he's going to get the deregulation that he believes we should have. And then all of that needs to be invested into. When are you gonna wait? You're gonna wait until it actually happens to buy it? I think you have to be three to six months anticipatory. So the question is, how much damage has been done

to the Q2 earnings? Can you believe Q3 is a trough that accelerates, you wanna buy stuff in May or June and get three months in front of it or is it later? There's a slope and there's a timing, periodicity and amplitude, right, physics. I think it's too early just because, again, I haven't seen anyone miss and act okay as a stock

and that would be be the number one way I'd want to answer your question. Look, the business roundtable, all these CEOs were in Washington a couple weeks ago, they came back somewhat more optimistic about the tariff stuff, and all of them were wrong two weeks later. We talked to CEOs at TriVar.

Nobody came back saying, I feel worse about the tariff situation two weeks ago. And you guys reported on that. So I guess, of course, nobody knows what's going ago. And you guys reported on that, right? So I got- Of course, nobody knows what's gonna happen. Yeah, but I think on the other side, and I think it's a throwaway comment to make to your audience, but I really do think it's gonna be

a stock picker market in April. It's a throwaway comment, because you can say, ah, ah, ah. But you know why it's gonna be? Because if you're Walmart or Costco, what do you do? You put some of it on your, you pinch your suppliers, you're just trying to eat some, you throw it, and you're okay. Like your margins, your relative structure,

you're gonna be better, because you have the power over your suppliers, right? But if you don't, if you're a smaller business and- There's your margin problem. You have a margin problem, right? So I think you're still in the early phases of figuring that out, which is why I don't like the low quality,

small cap sort of trade. And I think it's too early for that. I like healthcare, I like metals, I like the big companies that have pricing power and control over their suppliers, whereas I'm a little bit more concerned about how the CEO confidence will be. I love what you said though,

I think we will be at a point before the end of this calendar year where we're talking about pro-growth initiatives or talking about regulation. By the way, if there's 3,100 new regulations on the Biden administration, we can reduce some of those. That can help the cost for some of these businesses too. So you're gonna get that.

I just don't know if it's all the way till the July earnings season where I start getting more green shoots to get excited about. Yeah, and I mean, I'm wondering, Ali, if that's the way that you would see it as well. It sounds to me like it is big over small because there theoretically is more visibility and you do have more power again against your suppliers and the like and quality. Quality and discount evaluations. I mean as we know right now in terms of a

lot of when you're seeing weakness across sectors a lot of great high high quality companies decline along with their in terms of weaker counterparts- so for instance like you look at a- Brookfield corporation they're in terms of

a great infrastructure play they're leading in cross centers of real estate energy private equity and they're trading at thirteen half times earnings. We really don't think investors are really believing to the should play, they're leading across in terms of real estate, energy, private equity, and they're trading at 13 and a half times earnings. We really don't think investors are really believing to the rest of their businesses.

So looking at high quality discount valuations and having that long-term mindset, think that's the best way to pick up some great opportunities in this environment. Real quick, last question. Yeah, I think change in cash flow matters more than level. So it's always about like who's improving. But I hear you, yeah. Yeah, to be continued.

All right, good to see you. We're all kind of trying to figure this out as we go. Leesman got us depressed. I mean, let's just face it. He put fly in the punch bowl today. All right, Ali, thanks. Adam, thank you. Of course, our thanks to Steve Leesman, too.

Great to see you all. All right, to Christina Parts-Navalos for a look at the biggest names moving into this close. Hi, Christina. Hi, Scott. Well, shares of Bloom Energy right now are gaining on a look at the biggest names moving into this close. Hi Christina Hi Scott Well shares of bloom energy right now are gaining on a team up with Connagra brands the packaged goods giant Announcing that'll use bloom energies fuel cell technology to power its Ohio's production facilities And that's why you're seeing shares up over 7% right now Roblox also moving on the back of a lucrative partnership as the gaming platform announces

It's gonna team up with Google to scale its immersive advertising, which really includes rewarding users with in-game benefits for watching ads. Brands will be able to buy ad slots through Google's ad solutions and shares are up 4% for Roblox. Scott? All right, Christina, thanks so much. We'll see you in a little bit. Christina, parts of Nublis. We're just getting started here. Up next, Tesla front and center. After wrapping up a very ugly quarter, investors now looking ahead to that company's delivery data comes out tomorrow. We will discuss with Tesla shareholder Jean Munster.

He's with us after the break. Tesla shares posting their worst quarter in years just as key delivery numbers come out tomorrow. Let's bring in Tesla shareholder Gene Munster of Deepwater Asset Management. Welcome back. It is good to see you always. Hello. How are you feeling after this quarter?

You wounded, battered? How are you feeling? All the canvas? I don't know what the right adjective. You wounded, battered, how are you feeling? All the canvas? I don't know what the right adjective. I feel 35% less wealthy over the past few months since the Tesla numbers started to come down. And I am buckled up for tomorrow.

And I just wanna start with, I think, that the street whisper numbers of 355K, that's in the right zip code. The in print numbers of 355 K that's in the right zip code the imprint numbers of just under 380 are still a little bit too rich the 355 implies down 8% year over year so to answer your question how I'm feeling six months ago Elon was talking about 20 to 30 percent growth in calendar 25 I'm thinking Q1 comes in at down 8%. So it's been a remarkable reversal of speed.

It does not change my long-term optimism about the company, but it has been just this remarkable reversal. Okay, that's exactly where I wanted to go. I was gonna ask you if it's fixable, and you obviously think it is. How come it hasn't changed your long-term view of the company? It seems like a lot has changed here.

A lot has changed, but it's ultimately about physical AI. That's the competitive advantage that Tesla has longer term. And I think that what they're doing around optimists, what they're doing around the robo taxis, what all of this is clearly the future of the company. And ultimately, I think that investors are going to get behind that. Stock currently trades at 120 times this year's earnings. It's just a huge number and I think that you really have to believe in the long term and I think that they've got 37 billion in cash right now so they got plenty of dough to get to the long term. So I continue to feel good about that. That this year it's just going to be a throwaway year effectively. 2025 is a transition year. It's going to be something where the long-term investors, present company included, are really focused on next year. And just to quickly frame that in, Scott, is this year I think

that the revenue basically is going to be flat. Now that implies that deliveries this year are going to be down probably about 5%. They have that energy business, small 10% of revenue, but that's probably going to be up around 40%. Gets us to flat revenue. But next year, I think that the growth will accelerate back to that 35% is a much bigger clip. One final point, I think it's just important, we were just talking about the numbers. I do want to emphasize a dynamic that we're going to see tomorrow is the street will process the delivery numbers and then quickly shift to what's the earnings impact. And this comes back to how I'm buckled up for tomorrow at least, is that the earnings impact for the street

for calendar 25, the street's looking at non-gap numbers of 275. I think that the number is going to come closer to 2 to 220. And for fiscal 26, even though I think the the number is going to come closer to two to two twenty and for fiscal twenty six Even though I think the growth improves significantly earnings probably three to three forty in the streets at three seventy five So big picture here Scott. Let's just get this reset We've been waiting for two months for this get this reset underway and then start focusing on the longer term so how do you get a reset, you know your word if Musk is making himself fully entrenched in politics and he's about as entrenched as a CEO, founder could ever be, right?

I think we would agree with that. All roads always lead back to Elon. So how do you model the personality of Musk and how he has changed his priorities or at least added a huge priority to his already busy schedule and think that that doesn't have a longer term implication on the company's business.

Well, when I talk about a reset, I'm referring to the full year this year. And so, and that kind of captures the scope of your question. I think that I mentioned the down 8% deliveries for March. I think that June actually gets worse, down 10%, 12% for June, and then we start to see recovery. We're modeling for down 5% in September and up a few percent in December.

The way you get around that effectively is I believe that people's, I think appetite to listen to this to be impacted by this essentially people just get fatigue about the Musk kind of political narrative. And I think that, you know, history would say that that tends to repeat itself. And again, I think this is going to take this isn't a six week turnaround on that piece. This is called three quarters of this year. But that's how I think about the reset is Elon keeps doing what he's doing.

I think the general public and the brand issues just kind of start to fade to the back as people just move on and start talking about other things. It's not a matter of what they're talking about. It's what they're, you know, whether they're talking the talk, walking the walk. I mean, walking away and not returning. I mean, that is something that we're just not going to know. You know, I think everybody, including you. Yeah.

Maybe there is, I guess I'm a believer that there's limited shelf life to this kind of intensity in terms of this, how people feel about Tesla right now, at least the potential buyers and being turned off. But I think that they're also a piece to this that gets lost in the Elon brand damage question, which is, let's talk about the product itself. And objectively, it is the best bang for your electric buck. And I do believe that electrification is the future,

not for environmental reasons. I just think it's simply a better way to more efficient way of moving around. And so if in fact they do have the best product for the dollar, I think that the conversation is gonna lead back there and that's gonna bring consumers back. It's gonna take a year, but I think we get that bounce in 26.

Okay, appreciate your perspective and your insight. Gene, thanks, we'll see you soon. Yeah, Gene Meinster. Coming up, JP Morgan's Jason Hunter. He's flagging a key level. He says every investor needs to be watching. He'll tell us exactly what that

is after the break. Stocks coming off their worst quarter since 2022, heading into a month that is historically strong for investors. Will that be the case again this time given all of the uncertainty around the economy? Let's bring in Jason Hunter. He's head of technical strategy at JP Morgan. Find out what he's watching.

Welcome back. It's good to see you at this critical time. We're 5,600 right now on the S and P. What are you watching most of all? So for the S and P 500, the level we've been watching most closely is this 5,500 area for a couple of reasons. Number one, when you look at the November, February price pattern, what in hindsight ended up being a distribution pattern, the technical pattern objective from that was roughly 5,500. At the same time, what's traversed that area even more important, if you look at the Spyder ETF, so obviously an ETF that tracks the S&P 500,

if you look at the rolling one year volume weighted average price, that historically going back to the late 1990s has been a huge bifurcation zone for the most part for the S&P 500. It either holds it as support or once it breaks through to the downside, you see a dramatic pickup in

Volatility and then naturally that is your signal that we moved into a more protracted period of correction So this is a key inflection here that we think you know people need to pay very close attention to and respect I mean, I think people are trying to look for buy signals that you know, April's historically good We've had a lot of pain already in a really short period of time to look for buy signals that, you know, April's historically good. We've had a lot of pain already in a really short period of time. And they're trying to look, you know, at the forest through the trees and see what's out there.

How would you assess that? So I'd say just looking at the chart by itself, we've actually decelerated as we came into that zone. We saw an initial rebound from it in mid-March after some of those pattern-based signals that triggered on our model triggered. And as the market bounced, we had highlighted this 5750 to 5900 area that's likely where the index would stall out and that would cap the range for a while. We pulled back into the zone again and with the bounce that we had yesterday, it actually triggered another buy signal. So just looking at the chart

by itself you know our base cases we try to hold that here but we also recognize the bifurcated risk distribution associated with the policy uncertainty as we head into tomorrow. You know I'm thinking about the topic that's on everybody's mind and that's whether this is simply a growth slowdown a scare or I mean it's undoubtedly it is a a growth slowdown, a scare, or I mean it's undoubtedly it is a slowdown obviously. Whether it becomes something worse, a recession or not. Which puts specific sectors of this market on you know potentially thin ice.

Or if you don't have a recession maybe a great opportunity. Right? Cyclicals is an area where you are really keenly focused on Yes, we've tried to play you know the risks on both sides of it So obviously when you have this bifurcated risk with no real certainty on which one's going to turn up You look for ways to take advantage, you know cheap ways to trade both sides of that So, you know on the downside first on the bounces up toward that 5800 on the S&P What we suggest is looking for ways to hedge a potential move to the wrong side of that knife, where if we fall off the wrong side of that edge.

And that's basically long two-year note, two-fives curve steepener, dollar-yen shorts, or a trade we just suggested on Friday, which is a 10-year tips break-even tightener. Those trades should all do well if the S&P were to break to the downside. And the entry levels we've been suggesting, those were all ideal levels where you take asymmetric risk-reward. Now on the flip side, you had mentioned cyclicals. That's a market that's been under-owned for at least two years because the data has just been soft over that period. And you see base patterns that have developed from December through now for a number of those markets and basically going long on pullbacks there with fairly tight stops.

If things stay somewhat on stable ground, this beholds this 5,500 area, that's where the risk reward looks most asymmetric to the upside. And really that's a lot of markets outside the US. We favor this non-US equity exposure really from December on the technical side and a lot of those markets have moved up and certainly have outperformed the S&P over that period. And you think there's

room to run there because I feel like you know so many people now are talking about it that it's almost too obvious and I don't know if it's late or not but your work suggests to me that it's not. Yeah so if you look some markets have run

ahead of it and for different reasons so if you look at some markets have run ahead of it and for different reasons. So if you look at like Euro, US dollar or European equities, there was the fiscal story that came out of Germany that caused that particular cyclical market to move substantially. Copper, the copper gold ratio, that moved a lot, but perhaps because of the tariff announcements

around metals, we would focus on the markets that haven't moved just yet. And if you look at the vast majority of those are still fairly priced for about a 50 PMI, roughly where the data is right now and certainly not pricing in a one two-point lift in that data, you know, if that is what materializes into the summer. Jason, we'll see you soon. Thanks for helping us understand this better. It's Jason Hunter. Up next, Hims and Hers soaring, thanks to some fresh developments in the weight loss drug space. The details when we come back. Less than 15 from the bell now.

Let's send it to Brandon Gomez for a look at what's behind the bounce today and him's and hers. Hey, Brandon. Hey, Scott. Yeah, shares popped after the company said it would start selling Eli Lilly's branded weight loss drug, Zepbond and Manjaro. That's the latest in a chess match between Big Pharma and companies like Hims that have been offering compounded copies of those drugs.

Now, just last month, the FDA banned those versions from being sold. Hims says it will keep offering them in personalized dosages as the law allows. But this is a clear line in the sand, right? The real question for investors here, Scott, is cost. Now, a monthly prescription for HIMSS is $1,899, according to the company. That's 800 more than the list price of Lilly's site. HIMSS told me their price comes with a HIMSS membership, unlimited consultations with a provider and treatment support.

Look, it's a cost consumers will have to weigh for themselves. HIMSS will also offer generic liraglut Glutida Type 2 diabetes treatment from Novo that like Wigovia helps decrease hunger and improve blood sugar. Another move on the weight loss front, Scott. All right, Brandon, thanks for the update there. Brandon, GoMet's still ahead. I'll tell you what's driving a big move today in Johnson & Johnson stock. We're back on the bill right after this break.

We're now the closing bell market zone. CNBC senior markets commentator Mike Santoli is here to break down these crucial moments of the trading day. Plus a judge rejecting Johnson and Johnson's $10 billion baby powder settlement. Angelica Peebles with the details for us in a moment. Courtney Reagan on today's biggest retail movers. Mike, you first. Pretty nice move here. Late in the day, at least relative to where we were, all sectors but two are green. Yes. So we're firmed up trying to make yesterday's rally sort of count for something as opposed to just being a little bit of a snapback reflex at the end of the quarter. Although we kind of called it yesterday where the markets has kind of been pacing back and forth

in a small room waiting, you know, for the word on what it should build into expectations. You know, enough things are stacked up to where we've been marinating in these same issues for weeks on end. It feels like we've explored all the possible implications and possibilities. And so it's much more a matter of what are we priced for

relative to the mix of what we get tomorrow. So market is plenty oversold, sentiment is kind of more or less washed out, seasonals get better. You see room for relief. We've built up enough capacity for relief there. That being said, a 10% decline off of skyscraping levels with high expectations, still pretty elevated expectations

and valuations. I'm not sure that we've hit bone yet, but we don't have to. If the economy is holding together, you don't have to sacrifice more in the near term. We'll just have to wait and see what happens. I'll come back to you in a minute. Angelica Peebles, tell us about this J&J story. Yeah, big move today. The stock down more than 7% just ahead of the close and currently the biggest loser

in the S&P today after a judge rejected the company's latest attempt to resolve lawsuits claiming its baby powder caused ovarian cancer. J&J was trying to settle the litigation and bankruptcy court after the company struck a deal with tens of thousands of claimants. The judge dismissed the case, saying that J&J used a flawed process to solicit votes from tens of thousands of claimants, the judge dismissed the case, saying that J&J used a flawed process to solicit votes from tens of thousands of claimants. Now, J&J plans to try the cases in the tort system and will reverse the $7 billion that had set aside for a settlement. J&J, of course, is projecting confidence about their plan, saying that it's one 16 of the

17 ovarian cancer cases that it's tried. But the problem is that investors just want to be done with this. This has weighed on the stock for years now, and this was supposed to be the end and have some clarity there. But of course, now it will continue. Scott. All right. Angelica, thank you for that.

Angelica Peebles to Courtney Reagan on the discretionary sector. And thank you, Tesla is a big reason why. That is true. Yes, Tesla is obviously a part of the discretionary sector when you're looking at those subsector components, but in general, that S&P 500 sector is outperforming the others today, and it is led higher by Tesla, but also higher in components.

Ralph Lauren and Tapestry, PVH, that's the parent of Calvin Klein and Tommy Hilfiger. Not that component, but shares surging 18% following its earnings report in overtime yesterday with fuller detail on its conference call coming this morning. Investors too, Scott, I think just starting to do some homework, frankly, noting that not all retailers are equally exposed to tariffs now or those that we believe are coming tomorrow.

Levi up 5%, less than 1% of its goods are made in China, less than 5% in Mexico. VF Corp, that's at 4% as well. And it said that its exposure in sourcing for China, Mexico and Canada is quote minimal. Is that to say the tomorrow's impending tariff announcements are seen by the retail industry as particularly positive for the sector, but analysts have said the impact should be mostly mitigated

for many retailers through various strategies. We will see of course, in one sector that is not so insulated, grocery. I'll be talking about that tomorrow. Scott? All right, Courtney, appreciate that. Thank you. Courtney Reagan, we'll be back to Mike

at about a minute left. I mean, the interesting part of this whole story is that you're not going to get the event at the White House tomorrow until 4 p.m. At the close. So you're gonna have a whole day of what's really happening, any leaks coming out, any pre-reporting on, you know, things that they want to have out, but really you're gonna have a consternation kind of day because you're just not going to really know. No, you're absolutely not

going to know. I do expect you'll probably get some feints in either direction. We got the Joltz number today, didn't really answer too many questions. It was basically status quo. We get ADP tomorrow, so there's not going to be a lot of help. I don't we know if this White House is going to kind of go to the Max and essentially say we're willing to accept the year-to-date I don't think we're priced for full pain, but obviously we're all kind of in suspense about. We're going to find out really how much. Mike Feltz, I'll see you tomorrow.

That's Mike Fantoly. Bell is going to ring us out. Myths, S&P, NAV, positive. I'll see you tomorrow. 1