Closing Bell - Closing Bell Overtime: 2-day rally, Creating Clarity & Real Problems with Real Estate? 3/17/25

Episode Date: March 17, 2025

Stocks rallying for a second straight day as the market tries to rebound from a 4-week sell off. Allianz Chief Economic Advisor Mohamed El-Erian on whether this rally is for real and how the Fed will have to deal with economic uncertainty. Invesco’s Kristina Hooper says small cap outperformance today could be a sign that investors are betting on a Fed interest rate cut. Former Council of Economic Advisers Chairman Jason Furman weighs in on whether investors will get more clarity on the market once President Trump’s reciprocal tariffs are put in place on April 2. And real estate developer Michael Shvo on whether falling homebuilder sentiment and DOGE’s federal workforce cuts could be a double whammy for the housing and office space markets.

Well that's the end of regulation Diageo ringing the closing bell at the New York Stock Exchange. The Bragg House doing the honors at the Nasdaq on the St. Patty's Day. That is the scorecard on Wall Street but the action is just getting started. Welcome to Closing Bell Overtime. I'm Morgan Brennan with John Fort. Stocks surging for a second straight day as they try to rebound from a four week sell-off. And the Dow outperforming the major averages led higher by Goldman Sachs and United Health. But the Russell 2000, the real bright spot as small caps rally coming up. Allianz chief economic adviser Mohammed El-Aryan on whether this comeback has legs or

more pain could be ahead for investors and later real estate developer Michael Shvone on how doges cuts to the federal workforce and falling homebuilder sentiment could impact the housing and office space markets, basically broader real estate. But let's bring in in the meantime, Deutsche Bank, private bank, CIO Deepak Puri and Invesco chief global market strategist Christina Hooper. It's great to have you both here on a green day for the major averages. Christina, I'm going to start with you because last week, just a couple of days ago on Thursday, you saw the S and P fall into correction territory. We've seen a lot of technical damage done and maybe some recovery there just off of that. You see index rebalancing and some expirations of contracts, including VIX this week. How much is that afoot in the

market here versus the fact that it's been relatively quiet out of Washington? I think being relatively quiet out of Washington as well as the hope and potentially the promise of an FOMC meeting this week, which will not get a rate cut from, but we are going to get a dot plot. And that could give us insight into expectations for rate cuts this year. So I think that's one area of real positive surprise that markets could hold on to and put their hopes and dreams in. And so I think that's part of the equation today in terms of having a positive market.

Deepak, do you see it the same way here, especially given the fact, I think about Eddie Ardeni wrote over the weekend, the fact that there doesn't seem to be a Trump put in this market. And we know the FOMC is going to sit on its hands, or at least the market is pricing in near certainty that the FOMC is going to sit on its hands this week. But to Christina's point, the forecast, the dot plot are really going to matter even more. Is there a Fed put in this market and how much does it matter? Well, thank you for having me. I think the Fed put might be similar to the Trump put a bit out of the money for the time being, but that doesn't mean that the fed cannot give some right signals i think they

might be talks and maybe and uh... announcement of a pause in terms of the qt so the runoff of the balance sheet that might be positive something that the market would uh... would like i think in in in a sense what's happening is that the markets doing its own cost benefit analysis with regards to what's happening with the trade and tariff. And right now, the costs are a little bit more extreme than the benefits, which might

be in some time to come. And those costs are related to higher inflation expectations and lower growth. So unless something dramatically changes to that narrative, I think any gains that you see in the markets might be short-lived. Christina, getting a little bit more granular. Mega caps were up less today than the indices overall. Matter of fact, Nvidia, Amazon, Alphabet, Meta,

all negative. Apple and Microsoft, barely positive. Do you think Nvidia's GTC this week changes the narrative at all for those larger stocks, or is this just a broadening that's inevitable regardless of that? I think it's more the latter. My view is that valuations are very high among many of the mega cap stocks. And when there's a high level of uncertainty, investors are a lot more discerning and punishing

when it comes to high valuations. You could also be seeing with this small and mid-cap better performance part of a trade around expectations of Fed easing later this year. And keep in mind that it wasn't too long ago when expectations were that the Fed wouldn't give us any cuts this year. And that has started to change and it certainly was helped by the CPI print last week. So my operating assumption is that small and mid caps are performing better because there is hope that we could get some easing from the Fed which could be positive for the economy this year. And I think it's not just about the headwinds of tariffs. I actually think it's even more about the headwinds coming from Doge. Those cuts have a really big multiplier effect

if we were to see them come to fruition in any kind of very significant way. Okay, well Deepak also performing better this year, European stocks, you say they are attractively valued. What sort of five to 10 year thesis do you need to have to feel like you should buy them here? I think the first thing that has just happened, John, is that we did just get a 10-year thesis

in terms of the kind of fiscal program that the German policymakers have, at least on principle, agreed upon. This is going to be at least 20% of their GDP going into the economy with regards to infrastructure spending, climate change, and so forth. So, you know, that's 500 billion euros.

This along with the dead break release of 1% of GDP on defense spending, I think you're talking about Germany really, you know, cranking up in terms of their fiscal spending. And it's not Germany alone. France is doing the same. Other Baltic nations are doing it. So you're looking at a continent that has been left behind post-pandemic with regards to their fiscal relief, and I think you're going to see a lot more of that to come. You know, a quick question would be, which stock index has done better over the last

five years, DAX or S&P? And your viewers might be surprised a bit to see that the DAX has slightly outperformed the S&P over the last five years. So it's not just a story of this fiscal stimulus. Those earnings have been growing. They were so beaten up, especially European banks, chemical, industrials, that you have seen a put there. And I think with this new fiscal spending, the story is just evolving.

Christina, do you see it the same way when you look to something like Europe, where you do have, regardless of whether it existed five years ago or not, you do have fiscal spending coming into the equation in a bigger way through defense and other means in Germany specifically but also throughout the continent. Is that the area where you invest right now, especially if you're concerned about effects of Doge? Absolutely, because what we're seeing is positive surprise and improving potential for the Eurozone economies. And that is very significant when you don't have that fiscal impulse in the U.S. and you

have it in Europe. So I think especially because where we're going to see spending like defense is exactly what I think the doctor ordered for the German economy, which has seen manufacturing really ailing. So that's an area where we're likely to see a pretty significant pickup. I think it suggests that European equities will continue to be an area of real opportunity this year. Okay.

Christina, Deepak, thanks to you both. Well speaking of debt, shares of a firm under pressure today, although well off the lows of the session after Klarna announced it is replacing Affirm as Walmart's exclusive buy-now-pay-later partner. Our Hugh Sonn broke the story this morning, joins us now with the details. Hugh? Hey, John, that's right. So Klarna will soon offer installment loans to Walmart customers in store and online, pushing out Affirm later this year.

Klarna, which is nearing a highly anticipated IPO, will offer loans to Walmart customers in store and online, pushing out a firm later this year. Klarna, which is nearing a highly anticipated IPO, will offer loans to Walmart customers through a partnership with the retailer's FinTech startup called OnePay. The loans will range from three to 36 months in length, and with interest rates between 10% to 36%, I'm told. The OnePay deal comes at a good time for Klarna as it seeks to generate excitement

for its IPO later this year by demonstrating it can break up some of the partnerships that a firm has. For Walmart, the loans are expected to help it boost adoption of its one-pay mobile banking app among more of the retailer's 200 million plus weekly customers. John? I guess, Hugh, what investors might be wondering is, is buy now, pay later a commodity now where they've got to chase these big retailers and it's a race to the bottom margin wise or is an argument for a firm having not gotten this deal and it not being so bad for them in the long run?

Yeah, I mean, the bull case for a firm is that they've showed a little bit of discipline here. You know, after our story published, which broke the news, they put out a release saying essentially that this is 5% of their purchase volume, but only 2% of their overall income. So it's a relatively small amount. I think the market reaction today is, John, what is the concern about the knock-on effect? Does this mean they're suddenly vulnerable

to the partnerships that people really care about? And that would be Amazon and Shopify. So to your point, I think there is a question about commodification. I think the partnerships are really what fight against that. And that's what people are concerned about. I want to shift gears, Hugh, since you are our credit card guru here at CNBC. We saw shares of Discover Financial finish down almost 7% today, Capital One also lower.

Honor reports that potentially this deal between the two companies may not go forward. I mean, on the heels of comments from the FTC chair to CNBC last week suggesting that maybe some of the guidelines for reviewing mergers and acquisitions from the last administration might not be going anywhere. What are you hearing? Yeah, and so if you recall, the latest from Capital One was that this deal was supposed to close in early 2025. That is still their guidance.

I just spoke to them today. And so just to drill down a little bit in the report, the report was essentially that the DOJ was looking at antitrust concerns as it pertains to the subprime market. And so if you take a step back, DOJ isn't really in the driver's seat here. It's the Fed and the OCC that have deciding power over whether this deal is going to go forward. And as I said before, Capital One is still confident that this deal will go forward. Okay, Hugh Sutton, thank you. Well, as we mentioned a bit ago, Nvidia kicking off its GTC conference. CEO Jensen Huang expected to take the stage for his keynote speech tomorrow as Wall Street awaits updates from

the company. Senior Markets commentator Mike Santoli joins us for a look at the AI trade. Mike? Yeah, John, a couple of different ways or many different ways really to approach this AI trade. Here are a couple of ETFs that disassemble baskets of tech stocks that should be levered one way or another to the AI build out theme or implementation. So AIQ is a pretty good sized ETF that is a little more

tilted perhaps toward the NVIDIAs and the build out the semi-stacks. You see it's still maintaining this uptrend even though pretty severe gut check in the last few weeks. There has been this rethink in general of the runway for AI investment down the road. I find also interesting though this is a Invesco AI and next-gen software is how they characterize it. So it's a lot more maybe of the implementers, even though Meta and Nvidia are some of the biggest holdings. I find it interesting that, you know, it goes back to levels from early last year,

but we're bouncing off of that. So, you know, arguably we've had a little bit of a reset in expectations in this area, maybe valuations, and it's trying to make the case that there is a short- floor take a look here though at over a long term P. E. of Nvidia against Apple and John you and I talked about this about how maybe Apple's experience as a stock after the introduction the iPhone and

the bonanza of sales and earnings that came after it in the late two thousands in early twenty tens could be instructive here. So Apple and Orange here. You see how low the P.E. was through that whole period after they were just printing money on iPhone generation after generation. The market refused to give full credit for it. It kind of felt it was hit driven. It was a hardware cycle. We can't extrapolate those earnings into the future until eventually the software piece kicked in and Apple got credit for being more defensive and sustainably high margin.

You see here, Nvidia, again, not very expensive at 30-ish times forward earnings here, maybe a little less than that, more like 25 actually Nvidia is. But the question is whether it's gonna also face this period of persistent skepticism that it can continue to grow at that pace. I do wanna make sure I note though,

in this period, the overall stock market was much cheaper. So the S&P itself was under 14 times earnings or so for much of that period. So, you know, maybe there's a higher floor on Nvidia's valuation, even if it has to trade at a bit of a discount. Yeah, it's interesting, Mike. It occurs to me that historically,

when there's a transformative technology, you mentioned mobile cloud, you could throw in there too. It seems like there's this period where they hit a growth spurt and then hardware advancement leads to better software advancement, which leads to more hardware advancement back and forth. It's not clear yet that we've gotten there with AI

where the software has locked in to such a degree that people are getting the full use out of it. And maybe in a way, Apple's delay of Apple intelligence in Siri, you know, tells us that we're not there yet. I wonder if that has an impact on these stocks in the near term. Yeah, exactly, John. I mean, in terms of, you know, if you really wanted to get aggressive in paying up more

for Nvidia here, you probably would have to have some confidence that Nvidia was going to be entering that period of kind of self-reinforcing innovation and earnings growth and adoption. And maybe we just aren't quite there yet. Also, Nvidia is looking at $200 billion top line this fiscal year. You know, it's going to slow from there in absolute dollar terms and percentage terms. You just don't know how much. All right. Mike, we'll see you later this hour. Michael Santoli with the green tie for the win. Up next, Allianz Chief Economic Advisor Mohammed Al-Aryan weighs in on this two-day rally.

What market uncertainty could mean for the Fed? And later, former Council of Economic Advisors Chairman Jason Furman on the potential economic impact of President Trump's reciprocal tariffs, which begin in two weeks. Overtime's back in two minutes. Welcome back to Overtime. We have a news alert on Alphabet. Dear Trebosa has the details for us. Hi, Dee. Hey Melissa, so according to reports, Morgan, I'm sorry, according to reports we're hearing from the Wall Street Journal, According to reports, Morgan, I'm sorry, according to reports we're hearing from the Wall Street Journal Google parent alphabet is in advanced talks to acquire cybersecurity startup whiz for around $30 billion.

This comes less than a year after reports that it was looking at whiz for some $23 billion. That was last summer. The Wall Street Journal is citing sources for this news. We have reached out to Google and have not heard back yet, but Wiz is a cybersecurity startup and an acquisition for Google would give it a more robust cloud platform for its customers, something especially on the cybersecurity side that Google has been looking for. So that's what we have for now and I'll let you know if we hear anything else. All right, Dee, thanks. I'm also excited about some valuations for some other cyber stocks which will keep our

eyes on. Well, stocks rallied for a second consecutive day as investors tried to shake off fears of tariffs and an economic slowdown. Joining us now, Mohammed El-Aryan, chief economic advisor at Allianz. Mohammed, always good to see you. So consumer sentiment quickly deteriorating, growth forecast you predict will be revised downward over the next few weeks. Is that going to make this stock rebound hard to sustain

or do you think maybe it's priced in? So I think it's mostly priced in, John, and thanks for having me. We had two distinct stages to what was the fifth fastest correction since World War II. The first one was a good old growth scare. Then we had pretty nasty technicals with fast money in particular getting out of very crowded positions.

Most of the bad technicals are behind us. So the two questions going forward is will the growth scare be contained and will the hope in the fact put? Prove realistic or not. Hmm So how important is the Fed on Wednesday to this rally any sense we can get from the dot plot or elsewhere of how likely? They are to factor tariff effects into their willingness to cut So it's pretty tricky because I've also got to deal with the inflation concerns. You know, the survey data, and this is soft data, John,

I want to stress, this is soft data, but the survey data points both to weaker activity and higher inflation. And it's that second element that I suspect the Fed will worry about a lot. So, you know, the hope is they keep that two cuts. They don't go to one. That's what the market is.

The market is hoping for two right now. And the market is going to be looking very carefully at the language they use to describe the price dynamics. Mohammed, we've seen consumer confidence fall. We've seen inflation expectations rise. Is the risk of stagflation real here or given some of the readings we've gotten recently on inflation and given the fact that the tariff situation continues to evolve and change and we know is only one piece of a bigger puzzle that's also going to include tax policy reform and deregulation among other things, is that risk overblown?

So Morgan, I call it a whiff of stagflation. It's not real stagflation. It's a whiff of stagflation because of exactly what you mentioned. So what should we worry about? Anything that takes growth down near 1%. For me, 1% is stall speed. And if we get near stall speed, that will be of concern. So look at the household sector.

Hopefully they will have some confidence in their income stream because that's the only thing keeping them going right now. And businesses have to contain their wait and see attitude. The inflation side is more tricky because we are seeing a significant surge in inflation expectations. These are big, big jumps that have occurred over the last few weeks. So that one is trickier because can you really get that inflation if the economy softens? That's the big question mark.

OECD forecast out today basically saying Trump's tariff hikes are going to drag down growth in Canada, Mexico, the U.S., drive up inflation. The OECD is cutting its global economic outlook. It's warning of a broader trade war here given the dynamics we're seeing as well. We've been having a lot of conversations about the fact that the dollar's been weakening against other major currencies. Crude oil has come off. Yields have been under pressure here.

Do you invest in the US or do you invest elsewhere right now and why? So first on the OECD, I thought the most surprising thing about the OECD is what it did to US growth projection of next year. So it didn't surprise me they would use this year, but they really took down next year to 1.6%. That is a surprise to me that they're not saying this is just a bumpy journey. They're saying you know what

this journey is going to be quite long and other people haven't gotten there yet. That's what I found surprising. Look yeah I mean the US retains its advantages. There's a big debate going on its advantages. There's a big debate going on, which is at the end of all this, doge, tariffs, deregulation, at the end of all this, are we gonna sharpen our edge, or are we gonna erode our edge? And the jury is 50-50 on this.

But there's no doubt that right now, we still have significant structural advantage. I think that people are getting carried away about Europe, and China is still stuck in this muddled middle. So the U.S. may not be as pristine as it was earlier in terms of an investment thesis, but it still dominates in my mind the others. All right. Cautionary note on that Europe excitement. Mohamed El-Aryan, thank you. Thank you. Up next, what do we got? Real estate developer Michael Schwoe on whether falling homebuilder sentiment and rising mortgage rates are a double whammy for the housing market. Plus Jensen Huang speaks, investors listen.

Coming up, the tech stocks that could be big winners and losers following the Nvidia CEO's keynote tomorrow afternoon, the halo effect. We'll be right back. Welcome back. Homebuilder sentiment drops three points to 39 in March. It's the lowest level in seven months. The homebuilder ETF underperforming the S&P 500 index, that's down six percent year to date. Joining us now is Michael Schvaux, chairman and CEO of Luxury Real Estate Development and investment firm Schvaux, and joins us here on set.

It's great to have you. Welcome. Thank you. So what is your I mean, you're in key markets around the country and you're in and investment firm, Shfo, and joins us here on set. It's great to have you, welcome. Thank you. Great to be here. So what is your, I mean, you're in key markets around the country and you're in office, you're in other types of real estate as well. What is your sense of, more broadly, the commercial real estate market right now? We're seeing the market really,

as it's been for a while, separate the two segments. You have the super prime, the luxury segment, which is booming, it's been booming and didn't take a big hit after COVID. And you're seeing the commodity market which took a quite a big hit particularly on the office B office and C office has been suffering for a while. You're seeing a little bit of recovery there but with where cap rates are and where interest rates are they're going to have a really hard time recovering from kind of the post-COVID trauma of people working from home. You've made some very big bets and bets when other people were running away from office

in recent years, including Trans America Pyramid in San Francisco. We had Kathleen McCarthy, the co-head of real estate at Blackstone on about a month ago, and for the first time in years, she was saying that they are constructive on certain types of office property at Blackstone. How would you assess that market right now,

and how are you seeing that play out in places like San Francisco? So we bought, you know, probably five, $6 billion worth of real estate just at the beginning of COVID. Interest rates were low. You could borrow money fairly cheap. And we bought super prime assets,

like the Transamerica pyramid. We own three buildings on Fifth Avenue. In a moment where everybody thought that office is gone and people will never work from the office, right? What you're seeing today is full recovery and people will never work from the office, right? What you're seeing today is full recovery as far as the work from home that's totally gone. Trump has put a mandate that federal workers

have to come back. In San Francisco, the mayor, Dan Lurie, has made employees come back four times a week. So we're seeing that forced or voluntarily, people coming back to the office. Now what you're seeing at the super prime kind of top of the market is that if you're creating office environments

for companies, for their employees to come to, they will come, they'll lease more space and they'll pay the highest number. And that's what we're seeing. And I believe that Blackstone is understanding that now they're seeing the facts kind of as they transpire. San Francisco is just to finish with that, vacancy is still at 30%. At the Transamerica pyramid, we're at around 12 or 13% vacancy.

So you can see that at the top of the market, at the right type of product, tenants are coming in, obviously rents are double or triple what they were pre-COVID. Here's what surprises me about what you're telling us about the San Francisco market. You say AI companies make up close to 20% of requirements, most of which are early stage. If you had told me three, four years ago that the market was going to come back, I wouldn't have guessed it would be the startups in an area like AI, which is supposed to be, to some degree, replacing people and supposed to be attracting coders who you want them to be anywhere in the world, not necessarily in prime real estate in San Francisco.

Yeah, so KPMG just came out with a great report about San Francisco and about employment. So 90% of CEOs believe that San Francisco has the best talent pool for tech and AI obviously is part of that. 75% of those CEOs said that in the next 12 to 18 months, they're gonna increase their commercial footprint. What you're seeing is yes,

we all think AI is replacing people, but there's people that are needed in order to develop AI. You see OpenAI just rented, I think five or 600,000 square foot. And as you said, they're taking a big part of that market share. It's 20% is a big share of that industry. But when you look at the investment side,

right, 20% of all investment in startups are in San Francisco. I think almost $60 billion were invested in the last year in San Francisco startups. So it's not only the AI business, it's the startup industry itself is all driven by talent. So is this healthy or is it just a huge amount of money that's still available from the VCs from a little down south on Sand Hill Road to allow them to do this, and it's not gonna last, perhaps? I think it's the exact opposite. It's just the beginning.

I mean, AI is, when you talk to the AI firms, it's only the beginning. We're seeing the growth is huge, but it's like the beginning of the internet. When you speak to people in the industry, they'll tell you that where AI is is where internet was 20 years ago. So I think we're underestimating the power of AI and the power of the growth and how

AI is going to impact commercial real estate. That contradicts the fear that everybody thought computers are going to take over and we're all useless. We got a Fed decision this week. We know interest rates continue to be elevated here. You've got immigration crackdown on illegal immigration under the Trump administration. You've got tariffs starting to be implemented on certain things like steel and aluminum, higher tariffs.

What does that mean for building some of these big projects? So I think it affects more the commodity market. So if you're a home builder, you're building private homes, and with small margin, high volumes, it's a problem. Because you're really in the McDonald's business, right? You have to do a lot of volume with very little margin. Here we're looking at, it's a problem because you're really, you're in the McDonald's business, right, you have to do a lot of volume with very little margin.

Here we're looking at, there's a short term pain and I think long term growth in general in the market, but at the higher end where you have larger margins because you have much higher income, much higher rents, or much higher sales prices, yes it's gonna affect the market, but it's not gonna affect it how it affects the rest of the commodity market. So I think we're confident at the top of the

market, there's going to be some short-term pain, mostly because of the unknown. I think the unknown is scaring people more than the reality of what's going to happen. All right, Michael Schwoe, thanks for joining us here on set. It's great to have you. Thank you. It's a pleasure. Well, it's time now for CNBC News Update with Bertha Coombs. Bertha. Hey, Morgan. A summit between President Trump and China's President Xi Jinping could be on the agenda. President Trump said this afternoon that the Chinese leader will be visiting the U.S.,

quote, in the not-too-distant future, as the world's two biggest economies continue to levy tariffs against one another. The Pentagon said today that the strike on Houthi rebels in Yemen over the past two days hit more than 30 targets, including training sites for the rebels, and that there were dozens of militant casualties. President Trump said earlier today that he would hold Iran responsible for any attacks carried out

by those rebels. And Universal Music Group has filed a motion to dismiss Drake's lawsuit against the label for promoting Kendrick Lamar's Not Like Us, which is a diss track aimed at Drake. The label says in its motion that Drake is only suing because he lost a rap battle quote that he provoked and is trying to quote salve his wounds. Drake's lawyers called the motion a desperate ploy to avoid accountability. I wonder if they would rap if they wind up in court John. Bertha Coombs thank you. Well up next Mike Santoli looks at whether new data

showing Americans are eating out less is a red flag for consumer spending and the market. And later, former Council of Economic Advisors Chairman Jason Furman on whether more consumer spending concerns are increasing the risks of recession. Stay with us. Welcome back. Mike Santoli returns and he is serving up

a warning on consumers. Mike. Yeah, Morgan, the warnings came as part of today's retail sales data for February, which within it does have restaurant sales. And you see that the three month percent change in restaurant sales is one of the lowest on records outside of the pandemic.

It goes back to the aftermath of the 9-11 attacks in 01. So what's going on here? Obviously there's been a widespread caution among consumers to some degree to start this year. It seems like restaurant and travel is part of the areas where it's pretty easy to cut back and I'll say for restaurant sales in particular overall as a percentage of overall spending they have been pretty high since the pandemic. So arguably, there's room for that to be cut back.

Now, as to whether the market really needs to stand up and take notice of this, take a look at how this general sector of consumer stocks has traded recently. This is the travel and leisure ETF. You see, it's kind of gone straight down from the first part of this year, and it's essentially gone gone straight down from the first part of this year and it's essentially gone back to you know several months ago before bouncing here in the last couple of days. So it seems as if the market was really you know getting a lot of signals that this was the case. The

question is does it snap back? Is it all just an outgrowth of this this real plunge we've seen in survey-based consumer confidence data? Morgan. I mean it's a cute question and certainly we've seen in survey-based consumer confidence data. Morgan? I mean it's a key question and certainly we've had some bad weather. We had the wildfires out in Southern California. To your point we've had some hesitancy from from consumers and spending in general. Also eating out has just gotten really expensive but to me when you have Chipotle, Wendy's and McDonald's all saying that they're expecting stronger results in the second half of the year. That to me is going to be the thing I'm

going to be watching is how much of this is seasonal versus maybe the start of something something worse. How do we know I guess. No it's very tough to know you know more than a couple of months in advance. I do think it's true though that most indicators say that consumers in aggregate have the capacity to keep their spending levels up. It just seems as if they're just entering the year cautious after some heavy spending in the fourth quarter. So I think this is the vigil that we're undertaking right now is looking for every clue as to whether that can snap back in the coming weeks.

All right, Mike, thanks. Well up next, how top tech executives are speeding up their data organization strategies in this age of AI. And later, a look at which stocks could benefit from the halo effect of Nvidia's Developer Conference which is now underway. The push toward AIs forcing organizations to accelerate their cloud migration strategies with special attention to how they're managing their data.

I explored that recently with members of CNBC's Technology Executive Council. Carter Busse is Chief Information Officer at Workado, where software helps simplify processes by breaking them down into automated workflows. With generative AI, it's gonna get easier to put software to work for your business as interfaces shift from coding to chatting?

You're having a conversation with your data. That's how it's gonna be, whether it be on a Slack or MS Teams interface, you're having a conversation or you're having a voice conversation. That's the interface. I feel like the other people are easily going into a CRM system, an ERP system, or a manufacturing system,

individually may be gone. I think they're going away and their interface is going to be their internal chat or a conversation with the data. At Booz Allen Hamilton, where EVP Julie McPherson leads the digital solutions business, part of efficiency means helping the government streamline where data is stored and how it's used. Today many different agencies within or organizations within one agency have their own cloud environments. And look, likely they evolved that way for all good reasons, but where we are today, I think that's just an impediment to creating the outcomes that we want. Shared services across government, reducing duplication are really exciting opportunities. And you know what the realities are today, it doesn't have to take years to do that.

Data has powerful potential in higher ed too, where tech leaders are balancing privacy and safety. At Grand Valley State University in Michigan, Chief Digital Officer Milos Topic sees the potential for AI to help identify students who might need help before they fall through the cracks. Or if they regularly go to cafeteria and have lunch between noon and two every single day and then they haven't in a week. That might be an alert for an advisor or somebody else, a success coach who can reach out

and figure out what's going on. Are they sick? Are they dealing with a life event? Do they have a family member that they not need to take care of and they're no longer on campus, they're somewhere else? How do we get sooner to them to truly understand their needs

and then use our plethora of resources to support them. CNBC's Technology Executive Council is a membership organization for C-level technology executives from any industry. I've started a series of tech talks to pick their brains about how they're tackling various challenges. If you'd like to apply for membership, head over to CNBCCouncils.com slash TEC. Up next, former council of economic advisors chairman Jason Furman on whether the reciprocal tariffs president Trump will launch next month could create more market clarity for investors. Plus, Nvidia shares are lower as it kicks off its

developer conference but the stock has been rallying over the last week so coming up a look at which other stocks could surge or sink following any big announcements by the AI giant. You know, we've got a hard deadline that's coming up that's going to, I think, be great news for markets once they see the clarity about how reasonable it is to have reciprocal tariffs. There are a heck of a lot of countries that play by the rules, where we have big trade surpluses with the country because they're played by the rules and don't terrify products. And then there are a few, just a few really, where the trade deficits are huge, they're

persistent, they last for years. That was National Economic Council Director Kevin Hassett this morning on Squawk Box. He warned about more uncertainty in the coming weeks, but says next month's reciprocal tariffs should bring some clarity to the market. Jason Furman is the former chairman of the National Council of Economic Advisers. He joins us with his reaction. Jason, I take it you disagree with that framing of how tariffs will play out? Yeah, I disagree with that framing in two respects.

First of all, uncertainty is a problem, and I would be surprised if after April 2nd, we're certain about tariffs. The president has over a dozen different aspects of tariffs that he's asked different departments to do. He can keep changing his mind. But second of all, certainty isn't the only thing. To be certain that you have the wrong policy is also bad for the economy, and across the board tariffs is the wrong policy is also bad for the economy and, you know, across-the-board tariffs is the wrong policy. So if not certainty, when would you say is the moment of clarity when the conservatives, many of whom disagree with you about how this will play out, will have to admit that they're

wrong and you're right? The question is, do we have an announcement on April 2nd and we just stick with that set of tariffs or there's a clear set of signposts? Here's what you have to do as a country and the tariffs change and we stick with that. That would be certainty. On the other hand, are we still asking for Canada to be the 51st state and until they're the 51st state, we're going to have more and more and more tariffs on them. I just don't expect certainty. But regardless, certainty is not the only thing that matters.

You want to actually have good trade policies. So in light of good trade policies, I think about Harley Davidson. I covered this company years ago before anybody was talking about tariffs as a thing, as part of, you know, broader trade policy. And India had and continues to have, as far as I know, 100% tariff on US-made motorcycles

that are imported into that country. Because of that tariff, Harley-Davidson, and they've since closed the factory, but Harley-Davidson built a factory to build those Harleys in the country to bypass the tariffs. There are a lot of countries that have tariffs on American-made goods. If you use something like reciprocal tariffs to negotiate those tariffs lower, isn't that actually a good thing for trade policy, longer term?

Sure, if that's what we do. And we're going to have to see what the reciprocal tariffs are. If you look at other rich countries, on average, they have tariffs of about 1.5%. We have tariffs of about 1.5%. But different countries tariff different things at different rates. Europeans have a lower tariff on trucks than we do, but a higher tariff on cars than we do.

We can't simply match them on the highs and not match them on the lows. When it comes to developing countries, yeah, they do have higher tariffs. I would love to see some trade agreements to bring those tariffs down. But you talked about Harley Davidson. What you're going to end up seeing is my guess is countries around the world raising tariffs on Harley Davidson and retaliation for this. That won't help American manufacturing. It'll hurt it. I wonder how you think all of this plays into the broader policy for this administration, which is clearly focused, and you can argue whether the policy is right or wrong, but

clearly focused on reinvigorating the middle class here. Trade and tariffs are something that the executive branch enjoys almost sweeping unilateral power over in terms of enacting. But when you talk about things like tax policy or deregulation or cutting spending and addressing the budget more broadly and on an annual basis, you need to have lawmakers on board as well. So are tariffs and trade policy getting a lot of attention

right now because it's the area where the president can move the most quickly? Should we be focusing on these other aspects too? And if so, how do you fold that into your economic forecasting? Yeah, so tariffs, by the way, this debate about the extent of presidential authority, there's no doubt you have more authority there

than you have over the tax code. President may be going past the authority he has. Certainly the Wall Street Journal editorial page has argued that, but I'm not a legal expert. But absolutely, there's going to be regulatory changes coming. There's going to be tax changes coming. What's going to happen to the deficit as a result of legislation this year? I think likely it's going to raise the deficit.

You're talking about quite a lot of tax cuts, probably a lot more than any of the Doge spending cuts that are currently underway. Well, we've had quite a start. Jason Furman, thank you. Thank you. Up next, the potential winners and losers from NVIDIA CEO Jensen Huang's GTC keynote tomorrow

and how it could reshape the tech landscape. Don't forget, you can catch us on the go by following the Closing Bell Overtime podcast on your favorite podcast app. We'll be right back. Welcome back to Overtime. NVIDIA, one of the worst performers in the S&P 500 today as investors await CEO Jensen Huang's keynote tomorrow at the Chipmakers Developer Conference, our Christina Parks Nevalos joins us. Some companies could pop or drop depending on what he says during that speech. and St. Juan's keynote tomorrow at the Chipmakers Developer Conference, our Christina Parks-Nevalos

joins us. Some companies could pop or drop depending on what he says during that speech, no? Yeah, what he says and what he doesn't say. And to your point, this is what they're calling it the Super Bowl for techies, a Woodstock for AI, or AI Woodstock. And it should create ripple effects across the AI landscape with two newer themes this year. Networking, or I guess more details about networking and optical technology, which may sound technical,

I can't even say it properly and complicated, but could negatively impact traditional transceiver makers like Lumentum and Coherent. NVIDIA's new chip packaging approach might also impact the pluggable optics market. That's where Marvell plays a role. And that's part of the reason why you've seen investors take more of a bearish bet on Marvell momentum, as well as coherent. You can see on your screen all down double digits year to date so far. On the networking side, watch for SpectrumX portfolio updates, potentially bad news for

Arista Networks since their switches compete with NVIDIA. And then keep an eye on Fabrinet. They make optical packaging and already have a partnership with NVIDIA. We're expecting their name to come up on stage. There's been some market buzz also suggesting Super Micro Computer will be putting together NVIDIA's new rack systems. NVIDIA may also use a higher quality memory for its next generation Rubin architecture, which would impact positively micron shares, which by the way, their earnings are out Thursday after the bell. The smart money though isn't just watching Nvidia's stock move.

It's really tracking how Jensen's announcement could reshape the entire tech ecosystem in a one, two hour keynote. And we know you'll, you'll be watching it all and bringing us those headlines. Christina, parts and that will be there. Thanks. We have some breaking news regarding the feds. Steve Leesman has the details for us. Steve. there. Thanks. Thank you. We have some breaking news regarding the feds. Steve Leesman has the details for us. Steve.

Morgan, thanks. President Donald Trump on his Truth Social website announcing that he will announce Michelle Mickey Bowman to be the new vice chair for supervision at the Federal Reserve, replacing Michael Barr, who had that position for several years. Bowman joined the Federal Reserve in 2018. She was the former head of the Kansas Bank Commission. She has to be nominated, is my understanding, and approved by the Senate. The question becomes, how much reform and how much deregulation does the president want

in the banking system, and how much Michellegulation does the president want in the banking system and how much Michelle Bowman will deliver. He said, regulation and banking, our economy has managed for the past four years and it's time for a change. Bowman had been an opponent of additional regulations that Michael Barr wanted to put on and she was joined by others on the Federal Reserve. But the question is whether or not she ends up being as much of a deregulator as the president wants. I thought she was rather conservative in the changes that she wanted,

rather than wholesale reforms or deregulation. So this is interesting. She was approved by the Senate once. She'll be approved again, I would expect. But now the question becomes how much reform to Dodd-Frank? I know the banks are looking for additional relief when it comes to supervision as well as capital ratio So those remain outstanding the Fed is pretty much as I understand it frozen additional bank regulation during this interim period Where Michael Barr announced his resignation and before a new?

during this interim period where Michael Barr announced his resignation and before a new person is picked and that person is Michelle Bowman who is a federal reserve governor right now. All right Steve Leesman thank you with that news. Senate has quite a pipeline of nominations it has to get through so we'll add this to the list of things that we're watching. In the meantime stocks averages major averages finishing the day higher, continuing to try to rally here after hitting correction territory. Got a feeling as Christina was saying in video going to have an impact and beyond even just those stocks.

Yes, lots to watch here this week. That's going to do it for us here at overtime. Happy Saint Patrick's Day. Happy Saint well no pinching here.