Closing Bell - Closing Bell Overtime: 3/19/25

Episode Date: March 19, 2025

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

That's the end of regulation. Black women on boards ringing the closing bell. The New York Stock Exchange. Niagen Bioscience doing the honors at the Nasdaq. Well, that's the scorecard on Wall Street. The action's just getting started though. Welcome to Closing Bell Overtime. I'm Morgan Brennan. We've got stocks storming higher into the close after the Fed kept its forecast for two rate cuts this year while noting increased uncertainty about the economy. The S&P finishing up more than 1%. But coming up, we will get a reaction to the Fed's decision and what it means for your portfolio from Dan Niles, David Zervos, and Sarah Malik.

And if you're wondering where John Ford is, well, you'll see him in just a few minutes when he speaks exclusively with Adobe Chairman and CEO Shantanu Narayan from the Adobe Summit in Las Vegas. And later, Continental Resources Chairman and Founder Harold Hamm will be discussing the outlook for oil prices right now at the White House with President Trump. He's going to join us once that meeting wraps up. But let's bring in BD8 Capital Partners CEO Barbara Duran and Jeffries Chief Market Strategist and CNBC contributor David Zervos, also CNBC's senior economics reporter Steve Leesman.

As we do wrap up this Fed Day, Steve, I'm going to go to you. You're in the room. There were a lot of expected moves and comments by Powell, specifically the fact that rates were kept unchanged, talked about uncertainty. Looks like the economic projections were weakened here, inflation possibilities strengthened. To me one of the biggest takeaways was the fact that QT is going to get less tight here in the next couple weeks. I think that's a factor here Morgan but I'm going to give you my movie review here

rather than the technical analysis of the Fed. I personally think the Fed is in a very difficult position here, and I think Powell made it clear how uncertain it is, but I thought Powell was very confident in his options and what he can do. He doesn't seem to be panicking here, and I thought in terms of how the market reacted, I thought his demeanor was a big part of that. He was not fumbling for answers. He really seemed to have thought all this through. asked him the question about that really the stagflation idea Which is if you're in this idea in this situation of higher inflation and lower growth, what do you do? He seems to really have thought that through and there isn't much the Fed can be doing here

The Fed is very uncertain about the outlook so and and and you could see that in all of the projections So I think right now everybody's in a holding pattern. I wouldn't be betting the farm on any outcomes here, but in any event, I think that the Fed feels pretty competent where it is in its ability to deal with situations that are very unclear. David, one of the things that stood out to me was Powell's comments on the fact that it appears that consumer spending is slowing. Because you juxtaposed that to Brian Moynihan

of Bank of America, who was on CNBC earlier today, and here's what Moynihan had to say, have a listen. Our Bank of America consumers are putting 6% more money into the economy than they did for the first two and a half months of last year. And that's a pickup from the fourth quarter last year, which ran for 4 and a half percent. So that money is going to different places and you've heard,

you've referenced some clients who might be seeing different things, but a lot on services, a lot in entertainment. And, but the spending levels continue to go up. Your takeaway, David, on what we heard from Powell and what we've seen in the macro data thus far, which admittedly has been more of the softer data where we've seen weakening, and what we just heard from Brian Moynihan earlier today, which I would imagine is tied to more high-frequency data, given the fact that the bank has its hands on so many different aspects of money as it's moving through the system here.

Well, Morgan, I think it actually, there's a sort of broader issue here and I think Jay really highlighted it when he was asked about the confidence surveys and some of the weakness that we've seen in those confidence surveys and look these surveys have really not been helpful for over a couple years now they they were very negative but people still want I think he said people were you know negative in their survey they still went out and bought a car so I think he's really downplaying the importance of survey data and Highlighting more the market-based data like what he did with inflation Expectations and I think when he gets asked about the consumer sentiment or business sentiment surveys that seem to show some cracking and weakness

He's not taking that nearly as seriously as he might have before because they really misguided the street And all of their calls for recessions Two or two and a half years ago, so I thought that was the interesting part of how Jay Responded to those consumer sentiment Indicators and what you're seeing from Moynihan is not inconsistent with kind of what Jay said about the real data Which is the economy sits in an okay place. We've got a low unemployment rate, we've had inflation that's come down, it's a little sticky above target,

but yes, there's some signs that things could get bumpy, but there's always signs things could get bumpy. There's, as I think Jay said it, there's always sort of a 20% probability or so that we're gonna go into recession for whatever reason. So you always wanna be nervous about it, but he has the tools, as Steve said, to fight it. He feels very confident.

I think the market liked hearing that kind of Fed put style language and went up. And I think the QT, as you opened up your statement with, had a lot to do with the immediate market reaction today. Robert Duran, want to get your thoughts on this, especially given the fact that major averages were higher today, but definitely moved to another level during that Powell presser. And yes, we gave back a little bit of the gains here into the close, but as I mentioned before, the S&P is still up more than 1%, the NASDAQ up 1.4%. Did those moves, did that market reaction surprise you?

Not given what Powell said, because what I found most interesting, I mean, Steve is right about the, he kept saying it's uncertain, it's uncertain. And certainly about the sentiment indicators, David is right there. And I think pal was at pains to say, those are short-term indicators. We have not seen long-term inflation expectations, for instance.

So the consumer and business service may reflect the emotion of the moment and all the headlines. But what was interesting is that even though they raised the unemployment rate prediction for this year, they raised inflation, they cut GDP growth, they still are talking about two cuts. So to me that says they're seeing they don't, they're not certain but it looks like this is a lot of short-term noise.

Because given the underlying fundamentals that we've all talked about and seeing what's happening with jobs and consumer balance sheets. It seems like this could be a stutter step as people wait to get certainty on the tariffs. And certainly at this point, the market seems to me very oversold. It has swiftly discounted worst case scenarios. So I think there's some interesting picks in here. Steve, I want to get your thought on the fact that the dot plot is signaling to rate cuts this year, which the market was largely expecting, at least here in recent

days ahead of this meeting. What do you think it takes to see those cuts realized? Well, first of all, I think it's worth pointing out, Morgan, that the dot plot is a little more hawkish. Your most dovish people came up towards the center or towards the median. You had some people come up and say, you know, I don't, four people I believe are forecasting no rate cuts this year. It's still a median because there's a chunky nine members right there in that two cuts. So they are a little more cautious. And then you can see here the market essentially had some concerns about those rate cuts this

year and now it's a little bit more confident looking at before Powell spoke and afterwards. But Morgan, one idea I have is that it's very interesting and one of the things that might be giving the market some comfort here is Powell's clear forecast that the Fed will not be acting preemptively in any way, and that tariffs have two chances to not be an issue. The first is we're not gonna act preemptively in any way. And that tariffs have two chances to not be an issue. The first is we're not going to act preemptively.

And second is even if there is an impulse from tariffs into the indices or into the inflation indices, that we're not going to even act necessarily on that because we want to make sure that there's some kind of permanent or the idea of them bleeding out from tariff to non-tariff goods. And that I think is reasonably reassuring to the markets here and then that leaves you the other side of the mandate where Powell may be more likely to move if it's clear sign that there's weakening on the unemployment side so I think the mandate and the idea of the market thinking about where that where does the Fed defaulting to I think they're still

defaulting to cuts here if they can get away with it. David, the fact that trade policy and tariffs specifically tend to be something the executive branch enjoys largely unilateral control over, they don't have to bring lawmakers on board to get a lot of that policy enacted. It's obviously getting the most attention, it's obviously taking the most oxygen out of the room.

But how much is this just a first step in a broader multi-step strategy that is going to involve deregulation and tax policy changes and other things that will require lawmakers and others to come to the table? Well, Morgan, I also think it will require lawmakers to come to the table for sure. But it also, I think Jay was very specific about how he wants to take a holistic approach to the policy changes, all four of them, fiscal, monetary, immigration, deregulation, all of those are going to go in the mix. He's not just hammering on tariffs, and we hear, tariff, tariff, tariff.

We often don't hear a lot about government efficiency and deregulation, which have some pretty positive supply side effects on business. So I think that was another reinforcement. And overall, Morgan, I just would like to say I think one of the things the market might have been afraid of going into this a little bit, why we got a pretty nice reaction both in stocks and bonds, is that they were a little worried that Jay might be confrontational with the president, that we might start to see the tweets fly again or the ex-posts, whatever you want to call them.

And my bet is you're not going to get an ex-post out of the president after this meeting. I think the QT move was a little bit of a nod to the administration, a little bit of a, hey, we're not going to get in the way here. And that's a positive for the market. The market doesn't want to see the Fed and the executive branch having a bit of a tussle like they did back in 2018 so I think there's a bit of a sigh of relief on that I Want to point out the servos just guaranteed there's going to be a tweet now. Thanks a lot We'll be watching for it. We'll be watching for it

Let's see in the meantime, Barb, I do, I do want to get your thoughts on the other sort of big market story of the last call it couple of days. And that has been the stabilization we've seen in the mag seven stocks after a big downdraft there too.

Are there buying opportunities there or perhaps in other parts of the market now? Right. Yeah, yeah, they are. I mean, you know, I own all of these names except for Tesla and if you saw last year we often saw these opportunities arise where you know when the

stocks have run up so much and typically this group they are the source of profit taking when you want to rotate into other areas and certainly I think that is a big part of what has happened the first start of the year. I mean they were very highly valued when we came into the year and when things start to go south you take you take money and run. And I think that's what's happened here. So a lot of these names, whether it's Amazon or Meta, which have great long-term pathways of growth forward, very visible, very strong, with lots of opportunity for new growth in different areas, I think there are great buying opportunities down here. Some of these have not, we have not seen these prices in this valuation for quite some time.

Even an alphabet, which does have some hair on that stock in terms of regulation, antitrust issues, is under 20 PE. And yet their growth is pretty strong. So I think there's a lot of opportunities to be putting cash to work. And I have been, frankly. All right, Barbara Duran, David Zervos, and our own Steve Leesman.

Great to kick off the hour with you all. Thanks for joining me. Thank you. Well fine below earnings are out and Courtney Reagan has those numbers for us. Hi court. Hi Morgan. So most of this better than expected. Let's start with the earnings per share coming in at three dollars and forty eight cents adjusted. The street was looking for three thirty seven. So that was a beat. Revenue is also stronger than expected at $1.39 billion. The street was looking for $1.38 billion. The company giving us some guidance for both the first quarter and the full year. For the first quarter, the earnings guidance is much better than expected. Even in a wide range of 50 to 61 cents, the street was looking for 49 cents. Revenues for the first quarter expected between $905 million and $925 million.

That's better than the $898 million that the street was looking for. However, when you look at the full year, the full year earnings guidance is weaker than expected. They're giving a range for the full year of 410 to 472, and the street's consensus is 504 for that one. The revenues at 4.21 billion to 4.33 billion, sort of bracket where the street is

for full year revenues at $4.26 billion. I will say that for the quarter, same store sales were down less than expected, down 3%. The street was looking for those to fall about 3.3%. And we should note that the earnings guidance does include the expected impact of tariffs for both the first quarter and the full year. Right now, those shares higher in response

to a mostly stronger than expected quarter and guidance of 3%. Morgan, back over to you. All right. Courtney Reagan, thank you. Thanks. Well, the major averages rallying today after the Fed left interest rates unchanged. Let's bring in Niles Investment Management founder, Dan Niles.

Dan, it's great to have you back on the show and let's start right there. We talked a lot about the fact that there's not necessarily a Trump put in this market, but did Powell reinforce today the fact that there is a Fed put? Rightly or wrongly he did because I think if you look at it, they're still looking at two rate cuts This year and that's despite the fact that they edged up They edged up their inflation forecast and inflation is not near that 2% mark. And what kind of surprised me is I thought, you know, transitory was dead and gone after the massive mistake they made in 2022 by calling that inflation transitory and or 2021, I should

say calling that inflation transitory. And that's sort of come back and that they're trying to look through the fact that a lot of inflation measures are headed higher. So I've often said it's not about what the reality is, it's about what people think the reality is. And much like in 2021, where inflation went from 1.4% to 7%, But the S&P in 2021 was still up 27% because the Fed said it was transitory. If the Fed is still kind of on that path right now,

then yeah, I think you could have the market continuing to go higher. That's what I wrote this morning just because it was at oversold levels. But I think Q1 earning season is going to be a massive wake up call. But in the near term, do I see more upside? Sure. Until companies have to start reporting. So when you say you think Q1 is going to be a earning season, it's going to be a massive wake up call, in what way? You think companies are just going to be revising lower their guidance amid economic uncertainty from trade and other things?

Absolutely. Because, I mean, if you think about the quarters, the March quarter starts off slow because we're all in the holidays, right? It's the New Year's, et cetera. So more than normal, the quarter is back and loaded where the last couple of weeks of March is where a lot of business gets done. But what do you have on April 2nd? You have reciprocal tariffs.

Do you think a lot of consumers or businesses, more importantly, are going to go out and make some huge decisions at the end of March when you know you've got reciprocal tariffs sitting on April 2nd? So you saw this with the airlines, obviously, a week or two ago, where every single one of them cut based on business travel going down or consumer travel going down or both. Some of the revisions were pretty large, especially given oil prices have moved down. I think this pre-announcement season and then more importantly, the earnings season coming

up in Q1 is going to be problematic. Don't forget, estimates were already going down before all of this happened. If you look at the Q4 results, when the MAG7 reported, six of the seven companies had the Ford revenue estimates cut for the most important companies out there. So estimates were already edging down for the most important stocks, and now you've got this uncertainty sitting on top of it. Each one of the Mag-7s, obviously, a little bit different, but I think you're gonna see that trend continue

and potentially accelerate. Just like Powell, if you look at what he had for GDP, two months ago, it was sitting at 2.1%. Now it's sitting at 1.7%. You had a four-tenths of a reduction in two months ago, it was sitting at 2.1 percent. Now it's sitting at 1.7 percent. You had a four tenths of a reduction in two months in GDP growth rate. The last time we saw something that severe was during COVID. So, you know, I'm happy to see the market taking this well,

but if this was two weeks ago, you would have gotten a very different result, I think, to those dot plots. Okay, so you're slowing Mag a very different result, I think, to those dot plots. Okay, so you're slowing MAG-7 growth expectations, or maybe at least slowing expectations versus what are still high hopes for those stocks. You have high valuations more broadly across U.S. markets. Trade and geopolitical uncertainty,

a Fed reluctance to rate cuts. Is there better growth to be had elsewhere? Obviously, because what's funny to me is that people are going, oh my God, tariffs is terrible, it's awful. Well, if it were that terrible and awful, Canada's stock market wouldn't be up about 2% year to date if you look at that ETF. And Mexico, which stock market should be really getting killed,

wouldn't be up 12% year to date. And if you look at the All Country World Index, MSCI index, excluding the United States, that index is up 9% year to date, which is far different than the S&P being down about three and a half percent. So, and, but why is that? A lot of those valuations in those companies

are a lot lower in those countries. And the growth expectations in a lot of those valuations in those companies are a lot lower in those countries. The growth expectations in a lot of cases are being revised higher as they're stimulating their economies or doing things that makes people more optimistic. In China's case, you've got deep seek, obviously having people look at that and go, wow, these tech companies are trading at half the valuations in the US, and those estimates may be going higher while they're going lower in the US. That's why you've got K-Web up 29% year to date, while the MAG-7 is down 14% year to date.

That's where we're doing a lot of fishing. That's why we came into the year saying, we have no MAG-7 in our top five picks. We have cash as one of our top five picks in the US. That theme unfortunately continues to play out right now. Okay. Dan Niles, great to get your insights. Thanks for joining me. Thanks, Morgan. Don't miss Dan Niles and other CNBC Pros from

the New York Stock Exchange on June 12th for the first ever CNBC Pro live event. Now, it's Dan's first trip to the NYSE in years. June 12th for the first ever CNBC Pro Live event. Now it's Dan's first trip to the NYSE in years. He will be opening up his investing playbook. Scan the QR code on the screen or visit CNBC events.com to get your tickets today. Up next, John Fort is live in Las Vegas

at the Adobe Summit with a very big interview straight ahead. Hi, John. Hey Morgan, yeah, Adobe CEO, Shantanu Ryan, sitting right across from me. He's ready to open up about Adobe's latest innovations in AI, a very open strategy that might surprise some investors in how monetization is going to work across experience as well as Creative Cloud. You don't want to miss it, that's right after this break. Welcome back to Overtime.

Well, Adobe has had the CEOs of Coca-Cola, JP Morgan here, whether we're talking about advertisers, marketers, businesses, they want to understand more about the experiences their customers are having, trying to craft those. Joining us now to talk about that, Adobe CEO, Shantanu Narayan. Shantanu, thanks for having us back here at Adobe Summit.

Break down these latest announcements for me, particularly when it comes to experience and these agents being orchestrated. How's that going to change the way customers are experiencing the business process and tailoring things for their audience? Well first, welcome to Adobe Summit. John, it's great to have you here.

And it is the largest marketing and creativity event. And we use it as a catalyst to make a whole bunch of announcements. The announcements on the product innovation side have everything to do with an extension of what we've already been building with artificial intelligence. You know, we talked about how in all of our marketing products you can have assistance. And the next step is agents, which is they can now, whether you're trying to optimize a marketing campaign,

whether you're trying to make sure that the website is performing well for customers, how do you roll up all of this functionality into agents? And the way I like to describe agents are at the end of the day, agents understand how to do reasoning, they're performing tasks to achieve a business outcome. And so we announced a series of agents that will work to help marketers accomplish their tasks faster. Is that going to result in fewer seats and lower monetization,

or is it going to result in higher usage and higher monetization? I believe the latter. You know, all marketers want to create campaigns with greater agility. They want to have geographic variations. You know, we talk about this theme of personalization for all, and I think the era of AI

is really accelerating that. Over the last five years, we built the ability for people to truly personalize an experience for you, John, and now you have to create all of that content that makes it really clear that they understand you, they understand their likes, and so I think this is coming together, and at the end of the day, you still need that human ingenuity and the creativity

to create the campaign. So I think this will accelerate usage. In a way, what's old is new, it seems. Personalization is something that we're talking about on the web a decade plus ago, but with AI, it takes on a different character. I think an example that you guys gave is something like a hotel can tell whether people are more likely to book

when there's a beach in the background or there's something else in the background, down to the very image asset that's there and then make changes to optimize. How far away from that are we? And what's that worth to a customer? How much more are they going to pay for the ability to do that?

Well, John, you're absolutely right. The product that you're referring to is something that we call brand concierge. And so think of it, I mean, to your point, when websites came out and they became digital, they still didn't know everything about you, and you couldn't have a conversational interface. So now, if you can't have a conversational interface. So now, if you can actually have a conversational interface,

Marriott was presenting, or Delta Airlines, they've announced also that they are leveraging this technology to create a concierge, they can just have a conversation with you and say, John, where would you like to go? Where would you like to stay? Then by having to your point, the right images in the background,

they can make sure that they're serving you based on where you say you want to go. And so we think this will accelerate a customer's affinity and loyalty for interacting with a particular brand. And I think at the end of the day, the customer benefits because they get the experience that they want and the enterprise benefits because they're able to quickly service the customer.

There's a very interesting level of openness that you seem to have with this technology. You'll be able to call on Adobe resources through a Microsoft co-pilot. You'll be able to access other models, image creation, AI models, runway, VO for example, through Adobe Premiere, through Photoshop. Why is that a good thing? Because some people might say, well don't you want to own the whole agent experience and have the best agent? Don't you want your AI model to be the only one that customers are using? Well first if you take a step back and think about Adobe, we have always benefited by being open. PDF was an open standard from day one

which I think contributed to the incredible success. We have trillions of PDFs out there. Photoshop benefited by allowing a plug-in architecture where people could say, oh my god Photoshop is this platform through which I want to do image editing, let me add additional functionality. So play that out now in the era of AI. First as it relates to agents, if agents are intended to mimic things that people do and to automate tasks, if they can't talk to other tasks or can't talk to other people, the whole purpose of having an agent is actually defeated, right?

I mean, you want an agent to do something on your behalf, but it can be isolated in itself. And so to your point about Microsoft, if Microsoft Outlook is the dashboard that you use in order to perform tasks, so if you're in a Teams meeting in Microsoft and you want to create a campaign or discuss a campaign, we want that campaign agent to be embedded in the experience that you're using.

And so openness is really the case. And it's the same thing on the Photoshop. I mean, when you talk about AI and all these models that are emerging, as you know, Adobe has its Firefly model, but you know, Google has an Imogen and VO2 model. OpenAI has a Sora model. There's Runway, there's Flux.

And so each one of them will have a different personality. I mean, as you know, AI models hallucinate. And so they're all going to hallucinate a little different. And if people are trying to do ideation or creativity, allowing that plethora of models to work benefits somebody who's using Photoshop because they have all these creative ideas and then they can edit it down

within Photoshop to accomplish. So openness has always been a key tenet of our strategy, and we think that it benefits customers, and eventually creates more stable platforms. We'll see what happens with economic openness come April 2nd, when we expect to see a lot of tariff moves. How does that affect customers who are going to have to perhaps change pricing, we're going to have to change their strategies of communicating with their customers

and then what is the impact on Adobe that you're seeing so far? You know it's it's a great question John and I think everybody is trying to understand what exactly that this means because you know when you talk about tariffs in different industries it means different things. From what we are hearing from our customers, we've said that investment in technology is only going to continue. We are fortunate in that we're not physical provider of goods, and so the physical tariffs don't apply us.

But to your point, as it impacts customers, it's incumbent on Adobe to then help them with, you know, how can we make the technology more accessible and affordable, but it's not an area where we're spending as much time, because I think, unlike automotive or manufacturing, where I think there's much greater implications, we're hoping there are fewer implications on a company like Adobe.

All right, Shantanu Narayan, Adobe CEO. Thanks for having us back here at Adobe Summit. It's great to have you here. Well, it's time now for a CNBC News Update with Courtney Reagan. Courtney. Thank you, John. Well, during President Trump's call with the Ukrainian President Volodymyr Zelensky earlier today, he suggested the U.S. take ownership of Ukraine's electrical and nuclear

power sites. According to a statement from Secretary of State Marco Rubio and National Security Advisor Michael Waltz, Trump said having the plants under American control would be the best protection for Ukraine's infrastructure. Amtrak CEO Steven Gardner announced today he will step down from the job as the Trump administration threatens to roll back funding for mass transit and transportation projects across the U.S. However, White House officials tell Reuters Gardner stepped down at the request of the

White House. Anil Anamask's Doge department was given permission today by a federal judge to access to the U.S. Institute for Peace. He rejected a request to temporarily bar them after the agency sued to prevent Doge from taking over and accessing the independent nonprofits building and systems. Morgan, back over to you. Courtney Reagan, thank you. Well, Boeing the big winner in the Dow today after encouraging comments from the aerospace giants CFO. We've got those details straight ahead. Welcome back. Boeing shares taking off and leading the Dow's

rally today after encouraging comments from the company's CFO, Phil LeBeau joins us with the details. Hi, Phil. Morgan, if you compare the comments today from Brian West, the CFO of Boeing, with the comments during the first or the fourth quarter earnings, the results at the end of January, night and day, much more optimistic today. And essentially, look, they didn't give new guidance, but they did give some encouraging indications about where the company is and where it's headed. Let's start first off with the fact that Q1 is tracking right now in line with expectations. Again, they are not giving guidance but we know what the analysts are expecting for the first quarter and they said it's in line basically with those expectations. The cash burn is easing.

This was the huge headline of the day and production is improving and we've talked about this for some time that they have made a very slow but deliberate attempt at improving in production and it's starting to pay off. Remember 737 Max production is still capped at 38 per month. They're not there at this point but they are making progress towards that. The expectation by many is that they will get there and that cap may be lifted by the end of the year. Also, when it comes to their next aircraft, the 777X, Brian West says they have moved on to the next phase of test flights, which is encouraging. It goes into service next year. At least it's scheduled to go into service next year. So those are two pieces of good news. And finally, when it comes to tariffs, there have been a number of questions as you'll take a look at shares of Boeing. And Brian West says there is no near term material impact from any tariffs that may be put in place. Longer term, that remains to be seen, but near term, they're not seeing any impact. All right, good news. With the stock finishing up 7% higher today, Phil LeBeau, thank you. Up next, NUVEEN Chief Investment Officer, Sarah Malek,

on whether investors should be fading any rallies ahead of President Trump's reciprocal tariffs and her top stock pick amid all of this market volatility. Plus, a top analyst reacts to Five Below's earnings beat and what he wants to hear during the company's call, which just kicked off. Stay with us. Welcome back to Overtime.

Major averages all closing around a percent higher today but off the highs as the Fed says it is leaving interest rates unchanged as expected. Our next guest says she is looking ahead to the next catalyst for the markets, that's reciprocal tariffs. Sarah Malek is New York's chief investment officer, joins us now. Sarah, welcome. Good to see you. So, we're about at the levels on the S&P where we were mid-July, about eight months ago.

Market ended on the highs, but should you be more defensive here based on what might happen in two weeks on April 2nd, or have we seen the worst of it? Well, there's three reasons the markets have bounced from correction territory last Thursday, and that's because of the Fed today. They talked firstly about no more rate hikes. They talked more about rate pauses and rate cuts, which was positive for the markets.

They went back to the future and brought back transitory when it comes to the inflationary impact of tariffs and then they kept on the table two rate cuts for this year and two rate cuts for 2026. Now the question is where do we go from here? I think the next catalyst is going to be the tariff plan

laid out on April 2nd. And if we can get that catalyst where tariffs are watered down or we get more signs of economic strength and not so many signs of the consumer weakening, I think the markets can continue to rebound from here. But we're going to be in a bit

of a trading range, and perhaps investors will continue to sell these rallies until we can get more clarity on tariffs, and the next chance for that is April 2nd. So a big unknown, though, is how other countries will react to what the U.S. does on April 2nd. How big of a factor is that in where the market goes from here? I think that is going to be the key uncertainty on April 2nd, which is going to be how much retaliation will we see in terms of tariffs?

The market already expects tariffs to come into place in areas like Canada, Mexico, China, perhaps Europe. But the question is, how much retaliation and back and forth will we get on that? And who's going to bear the cost? Will it be the consumer or the producer? If the consumer's bearing the cost and we're already seeing decreased consumer sentiment, lower retail sales, and I think this is going to be another hit to the consumer. And the consumer has been the main driver of this economic bull market cycle that we've seen over the past number of years. Sarah, how much do you think tariff impact is

starting to factor into the guidance we're already getting? I think about five below reported earlier this hour. The results for last quarter were better than expected, stocks higher. The revenue guidance for full year though, a little softer than expected, but they did say that they are factoring

in tariff impacts already. So I just wonder how much companies are already taking this into account and thus it's already pricing into the market. I think the current risk for tariff impacts on companies and consumers is perhaps hesitating or pulling back in terms of their behavior because we're not sure what the real impact of tariffs will be. So I think that could create an air pocket and potentially negative GDP for the first quarter of this year.

And remember, if we get two quarters of negative GDP, that is a recession. So tariffs could become a self-fulfilling prophecy to create a recession. But the real inflationary impact of tariffs has not been seen yet. The good news is that ex-tariffs, inflation has been trending in the right direction.

It was trending to about 2.5%. But we saw the Fed today add about 30 points to their inflation estimate. And whether inflation is actually transitory or not is going to be the key in terms of how the Fed behaves. It is good for the markets to see that the Fed is confident that inflation from tariffs will be transitory and we still will get those two rate cuts this year,

as well as in 2026. Our expectation is that we get two rate cuts in 2025. It is interesting. We've seen treasury yields come off as much as we have in these last couple of weeks. Do you expect that to continue here? And why? Why are yields coming off? Is this still the growth scare dynamics or is there something else at play as well? I think mostly for yields, it's the growth scare, the signs that the employment markets are slowing, the potential concern over the impact of Doge, half of the payrolls created in the last five years were government

payrolls. So the impact of Doge is likely going to slow the employment markets. We're already seeing that. And then the impact on the consumer from tariffs. Now, on the other side, I talked a little bit about catalysts for the markets. Tax cuts could be a good catalyst for the markets. Increased deregulation. And a lot of that we saw earlier in Trump's presidency the first time around. So those are still pending catalysts. But as for the market, I do think you need

to stay somewhat defensive. We're likely in a trading range until we get one of these catalysts. And that's why we like companies like utilities and NYSORs, which are companies that are somewhat defensive during these periods of slower economic growth and lower rates. Always love when people come on and name names. Sarah Malik, thanks for joining us. Thanks for having me. Up next, Nvidia CEO Jensen Huang making headlines on how tariffs could impact the AI giant.

Got those details when Overtime Returns. Welcome back. Shares of Nvidia ended higher today as investors digest announcements from the GTC conference. But the stock has been under pressure ever since hitting a record high back in January. It's down 18% on concerns over China's deep seek and worries over the impact from President Trump's tariffs on Mexico, Canada, and China. But CEO Jensen Huang told Jim Cramer this morning that any impact from tariffs on the

company won't be meaningful in the near term. We're enthusiastic about building in America as anybody. And so we've been working with TSMC to get them ready for manufacturing chips here in the United States. We also have great partners like Foxconn and Wishtron who are working with us to bring manufacturing onshore. So long-term manufacturing onshore is going to be something very, very possible to do and we'll do it at an incredible scale. But the Chinese are still a key partner right now. You have a lot of businesses.

I would say 17 percent of your business. Yeah. In the near term, I would say in the near term, tariffs will not, the impact will not be meaningful. I thought those comments were really interesting, John, especially given the fact that, yes, China's still a piece of Nvidia's revenue, but they've already been de-risking and moving away from that as they've seen demand in other places in the meantime. Yeah, we're in the fear stage of the AI trade right now. We were in a hype stage, and now we're more in this fear stage where where Nvidia is concerned

It's well, what about the tariffs? What about China access? What about Microsoft? Maybe not buying as much as they were before and similar to talking to Shantanu just moments ago These CEOs these leaders are trying to say here's what we're confident This technology is going to be able to do right now and in the longer term Here's why we believe in it. And investors having to figure out how do we value this stuff based on that. Of course, Nvidia, the amazing run that it's been on, piling on trillions, literally, of dollars in market cap

over a few quarters. It has bulked up considerably. So that was important to hear from Jensen with Jim this morning. It was. And so were the comments from Adobe CEO with you just a little bit earlier in this hour.

Great stuff. Well, you can see much more of Jim Cramer's exclusive interview with Jensen Huang coming up at 6 p.m. Eastern on Mad Money. Up next, a top analyst on what he's expecting from Nike's earnings tomorrow as the stock tries to rebound from being the worst stock, the worst Dow stock over the past year. We have a news alert on the IPO front. Pippa Stevens has the details for us. Hi Pippa. Hey Morgan, well CoreWeave, the artificial intelligence startup, is aiming to price its IPO between 47 and 55 dollars per share. That's according to Reuters who said that they are looking to sell 49

million shares, so at the midpoint, that means they'd be raising 2.5 billion dollars. Now they did file their S1 back on March 3rd, which showed that Nvidia owns more than 5% of the company. Guys? All right, Pippa, thank you. Well, shares of 5 below are trading about 8 above here in overtime after posting an earnings beat moments ago.

Let's bring in Oppenheimer's senior equity analyst, Brian Nagel. Brian, five below has been struggling. The whole kind of off-price retailer segment has been in a bit of a funk, but some encouraging signs here, no? No, definitely. Hey, John, good afternoon.

So yeah, I think, look, I was just on the conference call listening to management. I think there are encouraging signs here. You know, I mean, look, I was just on the conference call listening to management. I think there are encouraging signs here. You know, I mean, it's always worth mentioning, within the retail landscape and in the dollar store landscape, the five below is a bit of its own animal. I mean, it's a unique business. But I think what we're seeing here

is some nice merchandise-driven improvements. And this is under new management. So I think it is encouraging, you know, the results we saw for the fourth quarter, probably more importantly, how they're at least initially talking about 2025. So with the threat of looming reciprocal tariffs coming up in just two weeks, how does that affect not just a five below, which is looking a little bit better here, but say the likes of a Nike, which is reporting pretty soon,

they make stuff elsewhere, they sell stuff around the world. Well look, that is the key question right now. Every investor that looks at consumer stocks is grappling with that question. Now interestingly, quickly on Five Below, they made the point that in the guidance they laid out for 2025,

they have factored in the tariffs. Okay, so with that guidance, like I was saying a moment ago, it's actually somewhat encouraging. It's even more encouraging that they factored in tariffs. But look, as we think about the consumer landscape broadly, there's a lot of moving parts here. Every brand, every retailer is basically looking at how much pricing power do they have, where can they raise prices, then how much power do they have? Where can they raise prices? Then how much leverage do they have with their supply partners to, so to say,

improve efficiencies, maybe lower costs there? And we just don't know the answer yet. And I think the bigger question, a bigger question is, what impact tariffs could have on consumer spending and more broadly, especially more budget constrained, lower income consumers?

So we just don't know, but it is encouraging with the five below they factored in. Now, as we think about Nike, that's going to be a very interesting report tomorrow. Tariffs obviously be a topic of conversation, but I think it's going to be more important the underlying turnaround that happens there. But with respect to Nike and tariffs,

I really think the key question there is the product innovation and how much pricing power Nike will have on its products as they continue to develop now better products. Yeah. And we know Nike has been working through inventory and has been promotional as it does that. I mean, it's very much a turnaround story. You've got a new CEO with the helm.

Is this a buy here, especially given the fact that expectations do seem to be pretty low once again going into this print? Yeah. Look, Morgan, I think it is a buy. Okay. Exactly what you said. given the fact that expectations do seem to be pretty low once again going into this print. Yeah, look, Morgan, I think it is a block. Okay, exactly what you said. I think expectations are low here. I think the stock is under owned. Investors are basically waiting for clearer signs

of a turnaround. I don't think we get any type of all clear signal tomorrow. I don't think that's gonna happen. But I think what Nike is going to start saying is, look, we've cleaned up this marketplace, we've worked through inventory, challenges remain, but where the new products are being introduced, they are seeing better sales. I think that would be a first step, a first step towards getting the market thinking more

holistically, if you will, about a broader, bigger turnaround opportunity at Nike. We had Brian Moynihan, the CEO of Bank of America on CNBC earlier today. And one of the things he talked about was the fact that he is seeing consumer spending stay strong and even potentially accelerate here into the beginning of the year, which has flown a

little counter to some of the macro data we've we've gotten recently. But he was talking about where consumers have been spending as well. And it's not on hard goods and apparel and in retail shops. It's it's on experiences and restaurants, et cetera. Is that what you're seeing as well or is the data showing something different?

Well, respectfully, I would disagree with Brian. I mean, great. He's looking at probably better data. He's looking at different data. But when I think about consumer spending, I've had a number of my companies that I cover very closely report fourth quarter results of the past few or several weeks. And almost every one of almost

every one of them has talked about some type of slowdown in early twenty twenty five after what was basically a pretty good if not strong holiday selling season. So yeah I am not seeing that. I think we're seeing a weaker consumer here

over the last no say few weeks couple of months. All right. Brian Nagel covered a lot of ground. Appreciate it. Thank you. Nice seeing you. Nice to see you as well. And of course, those Nike results, John, will cross in our hour here tomorrow on overtime as will FedEx, which I'll be watching pretty closely given the fact that they move so many different types of goods across the globe and are therefore an economic bellwether.

And I imagine going to have some comments about trade dynamics in the midst of everything we're seeing right now from a policy standpoint as well. Yeah, we've lost 5,700 on the S&P 500 for now. And there's this interesting two week period now in between today and April 2nd. Questions about what the catalysts are really gonna be there. Not a lot of earnings, not a lot of key earnings, right? We start another earnings season

a couple of weeks after April 2nd. So it's gonna be very important to watch on overtime what news comes out and why the market moves. In the meantime, the Fed getting a lot of attention today. It sat on its hands, it didn't do anything with race. They changed the projection pricing in or expecting two rate cuts here this year. But they're not the only central bank with decisions. We had BOJ last night. We've got Canada. We've got Sweden. We've got a number of others tomorrow. Not Canada, England. A number of others tomorrow as well, John. So lots for us to watch. Yep Yep I'll see you soon. All right we'll see you back here tomorrow that

does it for us here at overtime.