Closing Bell - Closing Bell: Market Churns on Tariff Twists 03/06/25

Episode Date: March 6, 2025

We break down what’s at stake for your money with our all-star panel including Sofi’s Liz Young Thomas, NewEdge’s Cameron Dawson and our own Kristina Partsinevelos, Seema Mody and Steve Liesman. Plus, Apollo Global Management’s Brian Fuertado reveals where he is seeking safety amid the market uncertainty. And, we drill down on some big moves in the energy space. 

All right. Thanks very much. Welcome to the closing bell. I'm Scott Wabner live from Post 9 here at the New York Stock Exchange. Today this make or break hour begins with tariff twists and turns and a market caught smack in the middle yet again. It has led to a level of uncertainty on Wall Street not felt in a while and it has continued to play out here in real time.

Let's take a look now at the major averages at the very moment another day of volatility stocks have been whipping around. That's the current picture. Now, the big news today was the S&P 500 breaking below its 200 day moving average towards the end of halftime earlier today. The VIX on the rise above 25. We're watching that closely, too. That's a spike of some 17 percent.

We're watching the Nasdaq today as well which is under more pressure not only from the mega caps but to the high momentum names which continue to unwind. We'll watch all of that very closely over this final stretch as well. It does take us to our talk of the tape the road ahead for stocks and your money. Let's bring in our experts Liz Young-Thomas, SoFi's head of investment strategy. Cameron Dawson, chief investment strategist at New Edge Wealth, both here at Post9. Christina Partsanevalos watching the sell off in chips. That's dramatic. Seema Modi is all over the momentum names,

which we already told you are under more pressure. Again, Steve Leesman looking at what all of this says about the current state of the US economy. Liz, I'll just go to you first. Your feelings and thoughts as you watch this market being pushed and pulled all over the place. I mean, it's chaos right now, right? We're in a chaotic environment.

The market is obviously not calming down, even with the recent announcement literally just minutes ago that tariffs had been paused again until April 2nd. No relief actually got worse in the sell-off. So I think the uncertainty and the fact that this now feels like we're just pushing off the decision until further into the future has everybody on edge. Not to mention, it's not just the market. It started to bake into some of the data. So we've seen the ISM data come in weaker. We obviously have this Atlanta GDP Now tracker that's come in pretty weak, which of course could change and reverse just as quickly as it went down.

But the data, I think, is concerning. And we have to pay attention to that. I mean, Cameron, the market is either going to need a chiropractor or a cold plunge by tomorrow because it's being pushed and pulled all over the place, knocked down, picked back up and knocked down again. And all of this is really about what Liz said, right? Scared that the economy is slowing and slowing fairly quickly.

And the uncertainty that comes with all of this. We have seen some signs of growth fear starting to pick back up. The thing that we're watching the closest is credit spreads. Credit spreads will tell you how concerned we should be about further downside of the market. They're only up about 35 basis points off the mid-February low. They're still on the high yield basis below 300.

This is not an economy that is falling out of bed according to the credit market. But I think we have to appreciate just how there was no margin for error in valuations when we started this year. Positioning was so very crowded. Valuations were so very high. So we don't find it surprising to see volatility. Our view for the year was wide and choppy range simply because you had no cushion

to absorb any form of bad news. Steve, I mean, this is an economy that has suddenly beset with a lot of uncertainty. You got it in the beige book, as you pointed out yesterday. You hear it from CEOs, you hear it from consumers, you see it through the data, you hear it from consumers, you see it through the data, you hear it from retailers and restaurants and other areas that are very sensitive.

Yeah, it's in the soft data now for sure and it's in there in a hard way, but it's not yet in the hard data. We're bracing a little bit for the jobs report tomorrow, Scott, right now this morning we have this 172,000 of layoff announcements from the Challenger Gray. You also have this talk anecdotally out there about the extent to which tariffs are causing people

to not make certain decisions like buying individual, consumers buying things, and perhaps CEOs and CFOs not making certain investments. Scott, two threads out there. One is the chaos on the tariff front. Nobody really quite understands why they're doing tariffs. We got Lutnik on today saying, we're doing tariffs on Canada

and Mexico because of fentanyl, and then all of a sudden these tariffs are partially or somewhat, nobody even knows how much have been taken back. And then the other thing, Scott, are these trade flows that are out there these capital flows you have this investment happening in Germany you have stimulus in China that is sucking capital away from the United States making Germany and China both rivals for all of that capital that came

here previously without a question and that's another thing that puts stocks under pressure in the US. It's caused a level of uncertainty, I think, Liz, that people just did not expect. Right before the election, we highlighted numerous times on this network a piece that Greg Ip of the Wall Street Journal wrote with a headline that said, the next president inherits a remarkable economy.

On election night, when President Trump won, there was an overwhelming amount of optimism about what was about to happen for this economy and thus the stock market. And here we are, some 40 days in, and we suddenly have an uncertain economy. We suddenly have data that's showing softness. We suddenly have local Fed's showing softness. We suddenly have

local Fed bureaus that are saying growth is going to fall by more than 2%. What happened? Where do we go from here? Well, I think what's going on is what's been sort of attacked with a lot of this news is the exact thing that the optimism was based on. The optimism was based on a pro-growth, pro-cyclical, pro-US environment, and now here we are in the midst of a trade war that not only includes China but other nations that I don't think we all expected it to include and could even get broader reaching as the year drags on into Europe. So now we have growth fears in the US, we've got some labor

issues in the US that are showing up, as Steve mentioned, in some of this soft data, and we've got concerns over what companies might do. And my biggest concern right now is that the longer this uncertainty goes on, companies do have to adjust the way that they're planning for the year. They either pull back or they hit the pause button. They have to make cost cuts in order to adjust for what might happen down the road. And the longer this drags on, those adjustments continue to get bigger and bigger. They can't all just be reversed.

There was also, you know, this idea that the administration wasn't going to let the stock market get too upset because the president cares about the performance of the market. Second only to his golf score. That's what they joked about, correct? Well, he is speaking in the oval, as we said, where he did make the announcement. He, the president, of course, which announced that tariffs on Canada and Mexico

are going to be paused until April 2nd. He also, a headline moving, I'm not even looking at the stock market, is what the president had to say. Maybe he wants to look away. What a contrast from 2016, 2017, which was all I do is win, you're going to be sick and tired of winning,

to the tone from the administration, which is be prepared for some disruption. We've heard the word pain. We've heard this idea that there's going to be a cost in order to do this rebalancing of the economy that they see as necessary, which means that things like the 10 year yield falling, which allows them to potentially term out the debt, think

that's it has a big bills problem. That's something that they seem to be caring a lot more about than necessarily where the S and P 500 goes. So this does not seem like an administration that is all too concerned about near term growth, maybe because if it happens sooner rather than later, a weaker period, they can blame it on Biden policies versus what they're doing today. Sure. But you know how it goes, right?

At some point, every president goes through this. You end up, you break it, you own it, right? At some point something happens and that's the way that it is depicted. We are getting more headlines out of Washington. Megan Casella has that for us now. Megan. Hey, Scott that for us now. Megan? Hey Scott, that's right. So we are officially hearing more now about that tariff relief that we had been waiting for. The president is in the Oval Office right now with reporters and he has now officially signed an executive action that amends those tariffs on Canada and

Mexico. And what he's doing here is he is saying that until April 2nd, just until those reciprocal tariffs start to take effect, all goods that are compliant with the USMCA can now trade without facing those new 25% tariffs. But we also had a chance to talk to a White House official about the details of this executive action and that official said that only about 50% of Mexican imports and about 32% of Canadian imports, excuse me, 38% of Canadian imports are compliant with USMCA. So that means that everything else remaining, about 50% of goods coming in from Mexico and

almost two thirds of goods coming in from Canada are continuing to have to face this 25% tariff on most goods, 10% tariff on Canadian energy. So there is some relief there, but it's only temporary because it's only until April 2nd and it's only on the USMCA compliant goods. Scott, I can also tell you we're getting some wire headlines. The president is continuing to talk right now in the Oval Office about these tariffs. He also says that the steel and aluminum tariffs will not be modified. Those are the ones that have already been signed into law and are set to take effect next Wednesday, March 12th. Those will hit Canada and Mexico. They'll also hit the automotive industry, which only just got some relief.

He also says there will not be a USMCA exemption for auto tariffs when they say those will take effect next month. Those are set to be part of the April 2nd round of tariffs as well, Scott. So some official relief now that has officially been signed by the president, but I don't think it's quite to the extent that a lot of people had been hoping for. Well, we'll see, Megan. Thank you very much for that update on the North Lawn of the White House. That's our Megan Casella. The market still obviously in an upset state, really the Nasdaq down two and a half percent.

On that note, you know, Christina, the chip names today, the SMH for that matter is more than 20% off of its highs. Everybody fixates on Nvidia. We're gonna get Broadcom, by the way, those earnings, which have been caught up like everything else, which has been caught up that stock in the drawdown. Yeah, you mentioned the SMH, and I'll get to Marvell and Broadcom in a second.

The SMH, the median name get to Marvell and Broadcom in a second. The SMH, the median name in there is 35% off its 52-week high. Josh Brown said that on your show earlier, but you look at other names like Intel on AMD, they're more than 50% off their 52-week highs or around there. So there's been a lot of downward momentum in this space, and it seems like most of these names need to be completely priced to perfection in order to move forward with many already seeing the downward trend. They have a strong earnings report with a Marvell, AMD,

Nvidia, and yet the stock sells off. Marvell is a great example that it didn't meet buy side expectations. So for Broadcom tonight, it seems like there's a lot more hesitation, especially because its valuation is more expensive than Nvidia's if you're looking at the forward PE ratios as just one marker So the entire sector as a whole the major overhang is what Steve talked about you have tariffs

You also have the looming AI diffusion rules coming out in May and then specifically for Nvidia the potential ban of H20 chips that go To China that is something that could really impact that name. And so it's an overhang as a whole, regulatory risks. The other part of this market, SEMA, that remains upset is the momentum unwind, which doesn't seem to be abating all that much. I mean, these guys are talking about in the last show Palantir is down another 10% Apple oven is down another 17%

I could give you five six seven eight nine more names that just don't seem like they want to settle down yet Yeah, some of the most prominent high flyers that had a strong start to the year are giving back gains you mentioned Palantir Robin Hood Tesla is another one of them and we've talked about how software is seen as a whole as more insulated from tariffs but a number of software companies this week reported negative earnings and a weak guide for the foreseeable year. That includes MongoDB, which is down about 20% after witnessing its slowest growth rate since 2017. And then CrowdStrike, a major cybersecurity player with its disappointing guidance, that weighed on the broader sector. So those two reads not providing a lot of confidence for the software sector.

And we also confirmed this morning that a number of CEOs from the technology space will be convening with President Trump at the White House early next week, Scott, to discuss a number of the issues at hand, including tariffs, export controls. So, expect some readouts from that early next week as we try to better understand how these tariffs are going to be implemented and, of course, the consequences it could have on the broader technology space. Any belief, Liz, that the volatility within tech is going to settle down anytime soon?

By the way, Nasdaq is off about 10 and a half percent from its 52 week high. So it's been correcting and it still is in that little bit of a tough spot. Yeah, I mean, it could abate if things slow down, but now it feels like maybe not until at least April 2nd when we get more clarity on this. Oh, you think we're gonna be going through this

for another few weeks? If we have to wait it out. In tech. If we have to wait it out, yep. Because like I talked about before, the part of the economy that all this optimism was built on is under threat. And yields have come down for sure, but not by that much. And a lot of these growth stocks are what's getting attacked as well. And when you look at just the proportion of return that was attributable to multiple expansion versus the proportion that was attributable to multiple expansion Versus the proportion that was attributable to earnings of course there's fundamental support under many of these stocks But that multiple expansion is what disappears very quickly, and that's what I think we're seeing right now

Yeah, financials Cameron to if you look at some of the you know the big pressure points. It's tech its banks Private equity yeah getting hammered big pressure points, it's tech, it's banks, private equity. Yeah. Getting hammered. Yeah, that divergence within financials where you're seeing those asset managers come under a lot of pressure, trading below their 200 day moving averages today, Apollo, Blackstone, all being in somewhat topping formations

over the past couple of months and showing signs that maybe under the surface, there's some weakness in the higher beta, higher cyclicality portions on the index. And if we look at tech overall, it's still trading at 26 times forward. This is not a washed out valuation for tech yet at this point.

And we're trading below the 200 day there. And Chris Verone always says, mistakes happen below the 200 day moving average. So watch out for more volatility. We think eventually that volatility is certainly buyable, but at the same time, you've seen this divergence. In the last four months, you've been cutting earnings estimates

as the stocks have kept going up. Steve, the obvious reason that banks have been going down because they're worried about the economy and rates continuing to go down, albeit today they're moving up a little bit on the 10 year. I do find it interesting that you know the administration continues to make the case that these tariffs are not going to be inflationary the way that people and the way that the market is acting as though they will be.

The Treasury Secretary himself was speaking here in New York today at the New York Economic Club and he used the word Transitory now the Fed was burned by thinking that Inflation was transitory the Treasury Secretary Suggesting today that these are going to be one-time price increases if anything, but they are going to be transitory You know, that's the conventional wisdom, Scott. First of all, the administration has two different arguments and it's changed its argument. The first was that there would be no pain. Remember, the president said the exporters pay that.

Well, they've now sort of internalized what the evidence is and what almost every research paper I've read on it says is that the consumers pay the tariffs. Now they're into this idea of it's a one-time event. That is the conventional wisdom, but let me tell you Scott there's sufficient doubt about it because of the context. When you talk about the one-time price hike you could think about 2018 where there were individual products that went up, but remember inflation then was running below target. This is a different environment. Inflation is above

target. The Fed is gonna be worried about that and it's gonna take its time, I think, and be very patient in terms of adjusting rates because of that. Plus, companies have pricing power. They show that they can raise prices in the pandemic and people are concerned about inflation to the point where inflation expectations are rising.

I'm afraid here, Scott, the administration seems to me like it's lost the thread. Liz said earlier that she thought that the administration gave the market something, but then you hear what Megan reports. I'm not sure they gave the market anywhere near what the market is looking for here. Looks like they backed off on about half of the tariffs, but then went forward and said, wait a second, all of those tariffs or something like it are gonna go back on in April You hear the reasons for the tariff but Nick came on this morning said oh, they're about fentanyl But then he talks about the idea they're about autos being made in Canada

So the reason is unclear you cannot connect the dots Scott about what happens next if you don't know what happened before And a lot of people are scratching their head. Well I mean it puts the Fed in a bit of a pickle. Speaking of the chair himself, Jay Powell is gonna be speaking tomorrow isn't he? He is and it's gonna be very interesting to hear him talk about this issue of tariffs and how he looks looks about it. I will tell you Scott the market's pretty aggressive now about thinking that the Fed I'm just gonna look at what the current quotes I have are, we do have a full screen I believe on the outlook for rate cuts and there's three built in. I must say I have my doubts about that because I'm trying to think of the month where the Fed is going

to feel secure that there won't be price hikes coming to the CPI from tariffs and then it's going to cut rates when you have an increase even if it's one time in the CPI, I think that's not going to be the case. So I think the market, I'm looking here, Scott, at a 87% probability of a June cut and a 57% probability of a second cut in July. So the market's pretty aggressive. We have 50 basis points. I have my doubts.

Steve, I appreciate you being here with us. Thank you. Thanks, of course, to our reporters, our market guests as well and what is developing to be a very interesting and busy hour. For more now let's welcome in the former Dallas Fed President Robert Kaplan. He's now a Goldman Sachs vice chairman with me as you see it post nights. Nice to have you on a day like this. Good to see you. How tough of a spot is the Fed in now? They're going to have to balance what is a potential slowing in the economy

versus the fact that inflation progress has stalled out and if anything may be going a little bit backwards. And so unlike 2019, I was there when we cut rates in response to tariffs because we're worried about slower growth. Fed's more constrained now. And so they'll have to balance the fact that the inflation job isn't done. And I agree with Steve.

I think when you see the SEP, the forecast in March, I think the market will be somewhat disappointed. I would guess the median will be closer to two cuts not three or four. I mean you've clearly articulated why they are in the pickle that they may be. Where do they err? Do they err on the side of the economy? Even if they're worried about the impacts that they don't know from inflation, they can't let one get out of hand at the expense of the other. So one of the things I'd be thinking about, this administration's been in office maybe not even exactly six weeks.

Between now and the March meeting, I would guess there'll be enough fog that the right answer will clearly be to do nothing. They'll then have a number of weeks to assess what's going on in the economy. There's four or five structural changes going on at once. That's why the tariff thing is only part of it. You've got government spending cuts, that would slow growth. Might be disinflationary. You've got a severe curtailment in immigration.

And so slowing workforce growth, that slows growth. You have regulatory reform, but it's on the come. It hasn't happened yet. You've got a change in energy and then tariffs. And the reason tariffs is such a problem, why I think the market is reacting the way it is. If you're gonna have a tariff dispute with China or Europe, that's one thing. But if you're going to have a tariff dispute with China or Europe, that's one thing. But

if you're going to domicile manufacturing in the United States, integrated supply chain and logistic relationships with Mexico and Canada is central to being globally competitive. We operate as a North American continent, and I think that's why the market was so surprised by these actions. I mean, can you bring all of the manufacturing? It sounds like you're you're addressing this now. Can you bring all of the manufacturing back to this country like the administration clearly wants to do with having a longer term build in inflationary pressures, i.e. prices going up? inflationary pressures, i.e. prices going up. The number one thing a CEO asks when they expand manufacturing is, is it globally competitive?

The issue is the way U.S. manufacturers have been able to be globally competitive and take share from Asia is using Mexico and Canada to do logistics and supply chains. Forty percent of the imports from Mexico is US content that's been going back and forth across the border. And that's why if we want to get people to reshore, you need to have Mexico and Canada in order to induce people to reshore. So I think that's a challenge to the argument

that this is intended for reshoring. The idea of tariffs and one-time price increases like the administration is suggesting can be transitory. I want to listen to exactly what Secretary Besson said today here in New York and then I'd get your reaction if I could on the other side. As we de-leverage the government sector, re-le leverage the government sector re-leverage the private sector which we'll talk about later can tears be a one-time price adjustment yes

while i don't i've agreed not to talk about perspective fed policy going forward i would hope that the failed team transitory to get back together and think that the failed team transitory could get back together and think that nothing is more transitory than tariff if it's a one-time price adjustment. That's the Treasury Secretary earlier this afternoon. What do you say?

So even before these tariffs were put on, inflation progress is going sideways. Let's put it this way. The tariffs certainly don't help to create more inflation progress is going sideways. Let's put it this way, the tariffs certainly don't help to create more inflation progress. They may hurt, he may be right, but the jury's out. And so it may turn out that the government spending cuts help with this inflation and other things, but the tariffs at a minimum, we know they don't help.

They may not hurt as much as people fear, but they don't help. And we do know they probably slow growth. I think I heard the Treasury Secretary say failed team transitory addressing the Fed, right? That the Fed made the miscalculation that the inflation was transitory. On that note, the nominee for the Council of Economic Advisers suggested that the Fed didn't tighten aggressively enough to fully put out inflation and that they should have put the economy in a contraction and that would have done it, which has led inflation

to persist like it has now. Your reaction? Yeah. So the transitory and other things the Fed might have done in 21 or 22, as you know, I thought they were they were late. They're worried too much about prognosticating, not enough about being a risk manager. I think they've learned that lesson. And so what they're going to want to do is let these events unfold. They're obviously changing day by day. They want to

let them unfold, see how they materialize, see how this puzzle unfolds, and be patient. And I think one of the lessons of the transitory experience, don't try to be a prognosticator if you're at the Fed. Be a risk manager. I mentioned your current role at Goldman Sachs as Vice Chairman. I'm guessing, you can correct me obviously, that at some point through all this, the executive leadership at the highest levels of the firm is reaching out to somebody like you to say, hey, what is this all going to mean for the economy? How should we think about this?

Do you think recession risks have gone up? How would you answer that if I'm anywhere near correct? So I spend two thirds of my time talking to clients and I learn a lot from clients. So what I'm hearing from clients is we started the year very enthusiastic. We have a number of actions we want to take and what they're now saying is let's not know but not now. They're slowing down. There's enormous uncertainty, either from government spending cuts, labor force availability,

tariffs is now a new uncertainty, and what I'm hearing is consumers are taking pause, CEOs are taking pause. It's not that they won't get back to wanting to take action. So the economy we felt for some time, I felt is slowing. The question is, is it slowing down to one and three quarters 2% run rate or is it something less than that? I think one of the things the administration could do that would help

is give clarity to how far they want to go with the deportations. So that workers who are in the workforce, but not sure whether they're a target of this, will know whether they can shop and go out more aggressively. And also some clarity and resolution on Mexico and Canada. I think both those things would help CEOs to be more aggressive in forward leaning.

I gotta go, I'm already gonna get in trouble, but the Atlanta Fed GDP now, it's like negative two four now. How much credence should we put in that in the way we think about the economy? It was based on particularly on the trade items and other items. I would guess the economy is slowing. It's not negative, but it is slowing. I think we'll probably have better input than that number in the weeks ahead.

I appreciate your time so very much being here to help us understand all this. Robert, thank you. Good to have you, Scott. Robert Kaplan. We're just getting started here. Still to come, Apollo Global Management's Brian Furtado tells us how he is navigating this uncertainty. We're live from the New York Stock Exchange.

You're watching Closing Bell on CNBC. You're going to see robotic production of iPhones and the jobs that are going to be created. People who build those factories, the mechanics who work on those robots. These jobs are going to be millions and millions of those jobs. These are great high paying jobs and you don't need a college education to do it. This is the re-creation of trade craft in the United States of America and Donald Trump is on it. He's bringing it back and you are going to see Apple.

Why did Apple say they're going to invest 500 billion in America? They, because they're going to build the robots to build their iPhones in America. Well, that was Commerce Secretary Howard Lutnick earlier today on CNBC. Let's bring in our Steve Kovach. He covers Apple for us. What did you make of what the Commerce Secretary said, Steve?

Yeah, Scott, just about everything he said is not actually what's happening with Apple, especially related to that $500 billion announcement they made last week. Let's just stick to the manufacturing thing because that's what he focused on. It's not iPhones. It's those artificial intelligence servers for Apple intelligence that instead of making overseas they're going to start making at a new facility over in Houston, Texas. Then on the robotic front, that is just not in the cards at all. That technology is a long ways off.

I know we get excited about the Tesla Optimus robot and things like that. But if you look what's going on overseas where these iPhones are made, those are humans making it. Thousands of humans travel in from rural China into Shenzhen to make those products. And then as far as bringing the iPhone manufacturing to the United States, that's just a logistical and expensive nightmare to do that. It's not going to have the workforce here that they have in China, that they have in places like India.

And, oh, by the way, India is a great place to talk about when we're talking about shifting iPhone production. Apple actually started doing that back in 2017. Here we are in 2025, and it's still just a very small fraction of the iPhones in total that are being made, 14% according to a Bloomberg estimate. That's nowhere close enough after eight years of trying it on the ground. Now extrapolate that, bring it to the United States. It's not going to happen anytime soon, Scott.

Appreciate the update and the clarity on all that. Steve, thank you. You got it. Go back up next to Apollo Global Management's Brian Furtado is mapping out where he is forecasting stability in this volatile market. We'll join me right here at post nine after the break back after this.

I think you know by now yet another volatile day for stocks with the S&P heading for its sixth straight day of a move 1% or bigger. One reason our next guest says private markets could offer investors respite from these stomach churning swings. Let's bring in Brian Furtado. He's partner and head of family office business at Apollo Global Management. Good to see you. Scott, it's great to see you again.

Thanks for having me. Yeah, I mean, these are kind of crazy times, obviously, in the market from your perspective. How do you feel about it? Yeah, no, incredible times. I mean, really volatile right now, obviously. And we see this as really just an adjustment phase. Obviously, we're looking closely right now

at consumer sentiment, at corporate sentiment, and just watching closely to see how those reactions happen. We've been looking at some of the data there, and it's clear that that's getting a little softer on both fronts, and so that's gonna mean that you have to look closely at unemployment levels going forward, and potentially, what happens there with the Fed.

So these are big changes that could be coming. Obviously, the jobless claims today was a little better than expected, so that's a good sign, but more volatility. But it means that as investors, we ought to be thinking more about diversification, for sure. And how so are you doing that?

I mean, the equity market is obviously volatile. Credit's been pretty good. Spreads are widening a little bit, but nothing to raise the alarm bells. Yeah, no, and the credit side, spreads are pretty good. Spreads are widening a little bit, but nothing to raise the alarm bells. Yeah, no, and the credit side, spreads are pretty tight. So there, we can talk about that in a minute a little bit in terms of what we're doing there to kind of improve on that.

On the investment grade side, spreads are very tight. But if you look at, and I think we can talk about this in terms of equities and credit, in terms of just thinking about how do you replace those exposures but do it in a less volatile way. I think that's the most important thing in these markets right now because the markets are moving so quickly.

The promise of alternatives, obviously, and Apollo is obviously very focused on that for our clients, and the lending those into portfolios. We're seeing the super large family office clients really think about how do they get more liquidity in their portfolios, because obviously family offices have been somewhat overloaded in private equity here, just like endowments and big institutions, and so they're looking to improve their liquidity, not necessarily go into liquid markets, but sort of that middle ground of semi-liquid alternatives. And then likewise, at the other end of the spectrum, the high net worth investor is looking to get more alternatives into their portfolio,

get more diversification in their portfolio, and get more semi-liquid structures. So they're sort of meeting in the middle, if you like, in their portfolios right now. This was thought to be, and I think there was a lot of optimism coming into the year, that private equity was gonna have a great year. Realizations were gonna be up for the first time in a while,

the guys have been sitting on a lot of stuff you wanna get done, and it feels like that's pushed off. Right, yes. I loved what Robert Kaplan told me a short time ago, the former Dallas Fed President, when talking to his clients about doing things, it's not no, it's not now. Yeah, it's certainly not now,

because the uncertainty that this is really creating is meaning that things are getting pushed off, IPO is getting pushed off, et cetera. And so we're seeing somewhat of a slowdown there, but we're seeing companies actually, and sort of private, a lot of private companies, looking in the middle at what we're calling hybrid structures. So they're looking for equity capital but they're also looking for creative solutions. We call it

structured equity and so they're looking for lending and collateral, collateralized investments but alongside an equity investment to unlock some ability for them to do things in their businesses. So that's an interesting area in the markets and it's another way of getting diversification back to your original question in portfolios. You've got to be thinking a little bit differently I think in these markets because just the regular way 60-40 portfolio is probably not a great place to be here and so blending alternatives in whether it's in credit whether it's in private equity to improve that diversification is really

going to help a lot in these markets. And I can just tell you from my conversations literally just today coming down in the car on my way here. Always doing work. Yeah. We've got a lot of people that are starting to accelerate those conversations and move a little bit more quickly than they would have maybe three or four months ago when they were saying, oh, I'm loving these equity market returns and we're gonna stick with this for a while.

But you really are seeing it real time now as people are starting to make moves in the portfolios. Because the volatility in the equity market has forced them into other areas of alternatives. Like when we talk about that and on this program, we focus so heavily on the network too, on private credit. Right. I love what Howard Marks,

he puts out these letters all the time, and he put one out, he says, when people ask me, can we talk about private credit, my answer's always the same, can we talk about credit? Right. There are a lot of opportunities, Mark Okada from Sycamore Tree was with us

a couple days ago, talk about the tremendous opportunities that right now exist in credit. Oh yeah, credit opportunities are amazing. It's really lumped into one big bucket, as Howard, as you mentioned. And really, we think of it as corporate credit, obviously, and then there's asset-backed lending, which is a really big part of credit that has heretofore been really on bank balance sheets, but now a lot of that's coming out.

And Apollo, we actually have 16 platforms that originate credit. No one really knows about these platforms, but they're the biggest trucking and leasing platforms, they're the biggest aircraft leasing platforms, et cetera. They're originating credit that we're now putting through conduits into our clients. So they have hard assets backing them and they can get some really interesting yields. And so this is what's happening with the wealth business is that sort of more institutional products that were sort of not really available to the high net worth client to the wealth clients to the family office clients are now being repackaged

through the the wealth ecosystem and now we have the ability to offer them to clients and they're providing great diversification especially in these markets so you know of all days to be here, it's a super interesting day to be here with you, of course. Yeah, of course, to talk about everything other than the equity market too. Right, right, and we're thrilled to do that because it's not the market that we're in.

Yeah, we'll have another conversation about it too. Thanks for coming down here. Really appreciate it. Thanks, Scott. That's Brian Furtado, again at Apollo Global Management. Up next, we're tracking the biggest movers as we head into the close. Christina Parts-Nevolis is standing by for us with that.

Hi Christina. Hi Scott. Well, two companies are actually defining the odds right now. One big box retailer keeps customers loyal despite economic headwinds. While a cloud security leader rides a wave of demand to a stronger future, we break it down. Next. Check it out next.

We're less than 15 from the bell back to Christina for the stock she's watching. Tell us. I'm I have some positive names. Zscaler shares are higher after it posted better than expected second quarter results. The company also raising its 20 25 revenue forecast and increasing demand for its cloud based security services. And that's why you can see shares up 3.5%. It's best day in over a month, despite the sell-off.

And positive results, also sending shares of BJs into the green. The big box retailer said, it's well positioned to keep members coming back, despite low consumer confidence, as well as tariffs. It also bucked the retail trend by providing an in-line outlook and that's why you're seeing shares up 11% its best day since November 2021. Glimmers of hope Scott.

All right we'll take it. Christina thank you. Christina Parsonvelis to Julia Borsten now for a look at how shares of Netflix are faring today Julia. Scott Netflix shares are getting crushed now down 9%. Yesterday afternoon CFO Spence Newman said at the Morgan Stanley TMT conference that the company's $18 billion in content spend this year, up 11% from last year, is, quote, not anywhere near a ceiling. And a new Moffitt-Nathanson report out today reiterating a neutral rating and an $850 price target for the stock, saying that they expect the benefits of password sharing, that password sharing crackdown to slow in coming quarters.

And there's another factor that could be weighing on the stock, it's nascent ad business, along with the rest of the ad market, is facing growing uncertainty. Scott? All right, Julia, thanks so much, Julia Borson. We are getting some more headlines related to the Fed, this time from Fed Governor Christopher Waller.

Steve Leesman is here with that. What is Mr. Waller saying, Steve? Governor Waller saying that rate cuts are possible after March. That is, doesn't see them happening in March, but he also says that two rate cuts got remained reasonable as a forecast for this year. He's waiting to see if the weakness, and we've talked about this, in the softer data shows up in the broader or the harder data. He does say Fed policy is still restrictive, but on the issue of tariffs and the ability

of whether or not they will be passed on to consumers, he says it's very hard to eat a 25 percent tariff, and he believes that companies will move, Scott, in order to protect their profits and profit margins. All right. Thanks for that update, Steve, thank you once again. That's Steve Leesman, Senior Economics Correspondent. Still ahead, we drill down into big moves in the energy space today.

And as we head out, a quick check on the market here. We're still down about four, well, there you go. You see the losses there on your screen here. The Dow down 1%, S&P down near two. It's the NASDAQ, of course, where the weakness is really persisting, down two and three quarters percent. We're back after this.

We're now in the closing bell market zone. CBC senior markets commentator Mike Santoli here to break down these crucial moments of the trading day. Plus Pippa Stevens taking a look at energy and shares of Natgas producer Venture Global Force as well. Mike your thoughts on how this market continues to trade. Spending a lot of time in the same area, the lows every day so far for the last three

have been right in that same spot. It seems a little bit neat and tidy that that would be the firm and final bottom and the NASDAQ 100 down 10%, also sitting on the 20,000 level. So a lot of this stuff is kind of coming together. You have to acknowledge markets plausibly oversold enough to bounce here. It's dealing with a lot of stuff, but I do think you could still work with a framework that says

we've probably seen the max tariff pressure. Not that it's gonna get better, not that it's gonna get too clear very soon, but it's probably not gonna get incrementally worse. And the jobs number tomorrow is gonna inform us a lot about what economy we're dealing with right now. The growth scare story is way out on the surface now. It was kind of a nuanced thing a few weeks ago. All that being said, job number Fridays are sometimes an inflection. You got to be aware that you're primed to have some relief even if it doesn't seem like

it would be the climactic. I mean, nothing else. We know that we're gonna be dealing with tariff headlines for another month, at minimum. There is energy today, Pippa Stevens. There is a lot of red on the board. That sector, however, is green. Yeah, that's right, Scott.

Energy stocks did reverse earlier losses in there. Now the sole sector in the green as oil drifts higher. Still the worst sector on the week, though, amid a cloudy demand outlook and oversupply concerns. But take a look at shares of Ventra Global. This is the company that went public in January with high hopes it could revive the energy IPO market and is one of the only pure play LNG stocks.

But Q4 exports declined 18%. The company said its Pacamans plant in Louisiana could cost $1.3 billion more than prior estimates and they issued disappointing guidance. It also remains mired in disputes with customers, including Shell, who say Venture Global failed to deliver contracted cargoes. For the full year 2025, the company now sees adjusted EBITDA of 6.8 to 7.4 billion, far short of the 9.3 billion that analysts were looking for.

Stock is now down more than 30 percent. Scott? All right, Pippa, thank you. That's Pippa Stevens. Momentum relief. Yes. None to be found. No, exactly.

It really is important to understand how much that still is spilling into the market. Momentum, factory ETF down 4 percent today. The banks being down. Obviously, there's a lot of agitated global capital market stuff going on with European yields flying and the dollar really getting crunched. And that doesn't help financials usually, but that also was a crowded trade. And I think you have some unwind there. In fact, if you look at the downside leaders today, it's not about tariff exposed companies for the most part.

It is big cap over owned tech. So look, at the lows today in the S&P, you're less than 1% above the July peak, right? You had that big July peak, that was the mag seven dominance moment. And so you've done some work here on the downside, going back in time testing. I don't think it means we're washed out

or anything like that, but it does mean that we've reset expectations to at least some degree. And I'm really watching FX volatility and bond market volatility because that could create the circumstances that we had in early August with that yen carried trade panic. Yeah, when we talk about momentum, Nasdaq obviously is the focal point there and it goes out two and two thirds percent red.

We're right across the board though. We'll pick it up tomorrow. For now, I'll send you in to overtime with Morgan and John.