Closing Bell - Closing Bell Overtime: 3/27/25

Episode Date: March 27, 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 Dow Jones ringing the closing bell the New York Stock Exchange wing VC doing the honors at the nasdaq Stocks finishing lower as tariff concerns weigh on sentiment, but the major averages are still pacing for gains On the week, that's the scorecard on wall street, but the action is just getting started. Welcome to closing bell over time I'm morgan brennan john fort is off today. Well ahead this hour We are awaiting pricing for one of the most highly anticipated IPOs of the year AI Play Core Weave. We've got much more on that in just a moment. Plus we'll get the latest read on the high-end consumer when Lulu Lemon reports earnings results. And FunStratz Tom Lee will join us with his take on the wild market action we've seen lately and where stocks could be

heading in the second quarter. So just a couple of days away from that. But let's get straight to the market action with Henny and Walsh, asset management president and CIO Kevin Ma and BD eight Capital Partners CEO Barbara Duran. It's great to have you both here. And as I mentioned, all the major averages finished in the final moments down here today. So second down day, most of the sectors in the S&P, it looks like finishing lower too, Kevin. Seen a lot of volatility this March,

which also maybe not be that atypical for March in general when you think about seasonality patterns historically. Your take on where we go from here. Yeah, talk about seasonality. I think March Madness actually started in the stock market this year as opposed to on the basketball courts as the S. P. moved into correction Tory in just 16 trading days. However, if I can expand upon

that basketball analogy a little bit, I can create final four factors that I believe will lead us forward in terms of market activity, one tariffs and trade if we get more certainty around tariffs and trade to the Federal get more certainty around tariffs and trade. Two, the Federal Reserve, if in fact they continue with their two rate cuts this year, that could provide some tailwinds for the stock market. Three, continued spending as it relates

to both artificial intelligence and as it relates to defense spending. Two themes that were in place prior to this market pullback that I think will continue for the balance of this year. And given the pullback that we've seen, Morgan, we have some real attractive investment opportunities to consider. So tariffs and trade, the Federal Reserve, ultimately what's going to happen with AI in terms of spending and defense spending.

Yeah. And of course, we should get some more details on tariffs and trade. And we have been on a daily basis, but April 2nd is sort of being looked at as the next kind of key day for that. And right here on overtime, as we mentioned, another key barometer on AI will be core week if we get that pricing here. Barbara Durand, I want to bring you into this conversation. Your thoughts on the market here

as we have all the major averages finishing down fractionally here, but again, a lot of uncertainty in terms of what moves us higher if we do go higher in the near term your thoughts yeah no you know I happen to agree with Kevin on the three things outstanding with tariffs number one but what I find interesting you know he mentioned how quickly this correction has happened and I think the market in terms of great uncertainty with unknowns the market discounts the worst case when they don't know what assumes the worst.

And I think we're getting pretty washed out in here because you're starting to see no, and I've been looking for no reaction to a big tariff announcement. And you look at today, the market went down, the low was right after the opening, and then it sort of went positive, it's been hanging in there.

I think investors are getting in order to have the Trump constant Trump tariff threats, which then he get backs off and now for instance it's been a question is he using it as a negotiating tool with TikTok and China he'll cut back on tariffs if they let the TikTok deal go through that sort of thing so I think we're going to see more of these pre-announces but I think investors are getting a little numb to it and I also thought it was interesting last Friday when we had bad consumer sentiment numbers the market actually had a big

rally day. So I think the market is discounting an awful lot and as Kevin said there are some very interesting opportunities that have opened up. You know that I think you can be cherry picking along the way if you have cash I certainly have been putting it to work and by the way for the first time I've been adding some gold to the portfolio because I think that is a long-term secular trend with the central banks buying.

It's very different than it's been used in the past as a defensive hedge against uncertainty and inflation, but that's the one thing I have to say I've been adding. I think there's opportunities in here. Not that the volatility is over. I think that continues for a bit until the tariff uncertainty settles down. Okay. So you're a gold bug. Kevin, I want to get your thoughts

on where you see the opportunities. Barclays today put out a note that basically said markets are under pricing trade risks and that they're switching their preference to global fixed income over equities. Do you think that's the wrong move? How do you see it? Well, let's look to the second half of the year

now that we're nearly the end of the first quarter of the year. If during the second quarter of this year, we get more certainty around tariffs, if in fact the reciprocal tariffs aren't as bad as we originally thought, if in fact the tax cuts are extended, and if we learn in June that the Federal Reserve

does cut interest rates by 25 basis points, those are three pretty strong tailwinds that could ride us out for a strong second half of the year. But I go back to those themes that were underlying this market over the last two years. If you look at the Mag 7, right now they're trading at about 25 times forward looking earnings. That's the lowest they've been since the end of 2022. You can't tell me that Nvidia, Microsoft, Alphabet, Amazon are going out of business. In fact, I'd make a very strong argument right now that we have a very long road ahead

in terms of the AI revolution, which could benefit CoreWeave, in fact, over the long term, and we'll learn more about there for looking guidance in terms of their IPO announcement. And then defense spending across the globe, we see countries, regions, including the U.S., continuing to commit more dollars towards defense and security.

So look to the large defense contractors to benefit from that as well. Yeah, and of course you could get a reconciliation deal taking shape in a more meaningful way as soon as next week as well. And I don't think defense spending here in the U.S. is going to decline. It's just some of those dollars are going to get reallocated. So Lululemon results are out, Barb, and I'll just note we're going through those right now. We'll bring them in just a moment. In the meantime, that's sort of seen as a key barometer

on state of the consumer as everybody's debating the health of the consumer, given some of these confidence numbers and other metrics we've seen. And then as Kevin just mentioned, CoreWeed as a barometer on the AI trade. How do you think of both of these? Well, Lululemon, of course, has been a big,

in a way, a turnaround situation. At the end of 23, they were at a high of $510. The stock, as you can see, is about $325. They missed numbers, hadn't happened in a long, long time. Question was, were they losing share to some big, important competitors? They lost their mojo. Well, they made some important management changes. They got their merchandising back on track, and it looks like the holiday season in all categories, all regions. They did very well.

Now what's going to happen here, we're going to get a read on what's going on in January, February, which was probably down. There's always, you know, post-holiday, a little bit of slack, had some bad weather. You also had, as we've talked about, the consumer sentiment. People have been holding back a bit. They're still spending. They have the money, but they're really uncertain. Headline day after day about the tariffs are hurting the growth and inflation they're not sure what's happening so i think lulu it's going to be it will be interesting to see what they're seeing out there i don't necessarily know that there's a a good forward read through because i think the the consumer right now could be in a stutter step situation so we'll see about that and core weave is interesting i you know i feel bad for them in a way because if they had just done this IPO in December or November, when the AI mania was really hot.

But right now, there's a couple things. One, to do an IPO in this kind of volatile market, not great in any stock no matter what. This one, AI, people have been going through this with a fine-tooth comb, and you've seen huge analysis in the media about this and their high debt and their you know almost obsolete inventory which they're using to collateralize their debt and you know all sorts of hair on this so I think they you know we'll see what happens they've got a definite I think price at the lower end because of all the issues here so you know cash burn is a big issue for them. We'll see.

All right Barbara Duran, Kevin Mond, thank you both for kicking off the hour with me. My pleasure. Lululemon earnings are out. Shares are down right now. Courtney Reagan has the numbers for us. Hi, Court. Hi, Morgan.

So it was a beat for the fourth quarter, but analysts were looking past that. Let's get through the fourth quarter first. Earnings per share for Lululemon, $6.14. This year was looking for 5.85, so that's a nice beat. Lululemon revenue is coming at $3.61 billion, also better than $3.57 billion expected. However, if you look at the guidance going forward, that is disappointing there. And also even the fourth quarter, same store sales were disappointing, up 3%.

The street was looking for 5%. And America's, that was flat. That's obviously the biggest and most important region international growing sure, but smaller and those same store sales were up 20%. So much of the growth not coming from Americas that is the key region. Gross margins for the fourth quarter were 60.4%.

That was better than the expected 59.7%. But again, it's that forward looking guidance and there's not much commentary here from the executives other than sort of reiterating their their power of three mantra that strategy going forward. So we need a little bit more color to understand sort of what went into this disappointing guidance. Hopefully we'll get that on the call. Back over to you. Okay Courtney Reagan thank you. Nvidia shares are closing lower today again after a big pullback on Wednesday. Now we're waiting pricing for Cori. Now this is a company that rents out access

to Nvidia chips and which is expected to start trading tomorrow. One of the most hotly anticipated IPOs of the year. Leslie Picker has the latest for us. And Leslie, you've been reporting on this all day, including the fact that Nvidia could be a so-called anchor tenant in this IPO listing and the fact that Nvidia could be a so-called anchor tenant in this IPO listing and the fact that Nvidia is a stakeholder too in general.

Yeah, Nvidia all around this one, hotly anticipated as you mentioned, sounds like it's a bit coolly received. The whisper number right now is $40 per share, which is about 15% below the marketed range. And that's the price by which I'm told that Nvidia, as you mentioned, agreed to serve as an anchor investor with an order worth about $250 million.

Prior to the IPO, Nvidia already owned 6% of CoreWeave. I'm hearing three big investors have put in orders for about half of the book, but they still may need to cut the amount of shares to better match demand. Final decisions taking place now that the market is closed, as with many deals, though, timing is everything. The AI fervor seemed unstoppable through much of last year, but earlier in 2025, the deep seek phenomenon called into question some of the CapEx figures on AI.

And just earlier this week, Alibaba's Joe Tsai warned of a bubble in the AI data center build out. And while its revenue has skyrocketed from just 16 million to $2 billion over the last three years, CoreWeave's losses have widened. Some analysts have suggested that some creative accounting has led the company to showcase higher gross margins than they actually enjoy.

However, as potentially the biggest IPO of the year, there are a lot of eyeballs on how it does, especially given the number of other potential IPOs, be it Klarna or StubHub or eToro that are now waiting in the wings, Morgan. Yeah. I said anchor tenant. I'm an anchor investor. Kind of the same thing. We were just talking about this with our market panel, and Barb Durand was just flagged at

the fact that you've got cash burn, you've gotpex spending you know in general very heavy still the debt load chip depreciation concerns here path to profitability massive dependence on two hyperscalers for something like 3-quarters of the revenue here as well How much can we actually use this IPO offering to gauge how others are going to do in the market given the fact that? It is coming at a key moment of concern in general around the broader AI trade. Yeah, no, all of those things put together tell you they paint a picture for exactly why CoreWe wants to go public and also why CoreWe really needs to go public to pay down that debt to replenish some of the cash burn.

I mean, all of that is extremely important for a company in that situation. Now that also changes the leverage dynamic and the buy side knows that and therefore they may be pushing down the price a little bit more. So it is an idiosyncratic element in that sense. However, if you are a large mutual fund investor and you put money into core weave, even if you get it at a discount and something happens tomorrow where it doesn't perform very well, that definitely affects other IPOs that are potentially in the wings because it makes that whole risk dynamic just a little bit higher for new issues overall. It kind of creates more of a discussion around IPOs. Even if they have a totally different financial profile and a different, you know, business and a different place that they operate, you're still largely

dealing with a lot of the same potential investors to buy these deals, and it's a lot easier to sell them if they're making money on recent IPOs. All right. Leslie Picker. Thank you. Now, let's get to Senior Markets commentator Mike Santoli for a look at Market Dynamics as the comeback attempts potentially stalls here. Mike. Yeah, certainly pause stall hesitate. We're not sure which we'll have to wait and see.

But take a look at the breakdown of where the downside pressure has come so far this year. This is the S&P 500 excluding technology. And you see it's kept its head above water here just just above the flat line on a year-to-date basis, whereas you have the NASDAQ 100, that's driven principally by the mega cap growth stocks down almost 6%. That's not to say the tariff-impacted stocks are not also acting as a drag. Obviously, transports have been weak. You've had industrials that are off like 8% from their high. But in general, the rest of the market outside of tech is finding a way to hang in there. Now, you guys were just talking about the speed

of the correction, the S&P 500 year to date, which we just saw from February 19th down to a low a few weeks later. That is interesting. Now, historically, the faster a 10% drop, you can tend to have better upside results in the three to six months after that. Although you sort of see,

we're just sort of chopping around this, you know, not even recapturing half of what was lost already. I wanted to sort of look at this, you have this nice high in the first part of the year and then a quick correction and compare it to a year that some people are bringing up 2018, which also like this year came after a very strong year,

the prior year and 20% higher in the S&P 500. And what happened here was, guess what? A 10%, almost exactly 10% correction in about three weeks, two and a half to three weeks. You did get a recovery, not a full recovery, not a very strong, exuberant one. A lot of people were complaining, wow, we didn't really see tremendous demand for buying that dip. You didn't really gain momentum, but the market managed to grind higher until we got to the latter part of the year. That's when it was perceived the Fed was staying too tight and tariffs couldn't be shrugged off anymore. There was a slowdown scare and you did get that mini quick 20%, almost 20% setback later that year. So nobody's necessarily prepared to predict exactly that, but it's the kind of thing that

can happen if you don't get a really energetic response to a 10% correction relatively soon, Morgan. And of course, 2018, to your point, was the year when in Trump won, you did start to see tariffs and some of these policies going into effect in a more meaningful way. So it does raise the question, how much can we, and I know policy is gonna dictate it, but how much can we turn and look back to that first Trump term to sort of get a gauge of how the market could play out here?

I think it's worth just sort of keeping it in mind, not just because of the same president is exerting some of the same pressures along with the same policies, but because 2017 was an incredibly low volatility melt up year. It's very similar to what we saw last year. There was strength in the underlying economy, the Fed was considered to be out of the way, and then you have this kind of back and forth reckoning with a different environment, a little bit of a volatility eruption, and then yes, the market tries to look on the bright side

to see if the policies are gonna hit. By the way, the economy ended up being fine here. The Fed sort of stepped off the break, and everything was okay. It really was mostly a scare in late 2018, but it didn't feel good in the moment. All right, Mike Santoli, looking back through recent history.

We'll see you later this hour as well. After the break, our animal spirits still present in the markets. We're gonna ask long time bull, Tom Lee, if he sees upside in the second quarter after a downbeat start to the year. And we will talk more about Lululemon's quarter as that stock gets hit hard after disappointing guidance.

You can see shares are down about 7% right now. Over time, we'll be back in two. Welcome back. Market's sliding in the final hour today. BlackRock's Rick Reed are saying last hour that the animal spirits that helped drive the market higher at the end of 2024 are part of what's hurting stocks now. Take a listen.

We came in the beginning of this year. It was all about animal spirits, and it seems like it's moved to animals in hibernation from animal spirits. And that can translate into a bit slower growth for a couple of quarters. So that was interesting to me, Tom Lee, as I bring you into this conversation, the head of research at Fundstrat and a CNBC contributor, because he's talking about animals and hibernation, not animals dying. It goes back to this idea of uncertainty around things like trade and tariff policy and the fact that as of right now, in the midst of that uncertainty,

perhaps companies are sitting on their hands before they start to make any kind of future investments. So if that's the situation, how much does getting some sort of certainty now frame the investment thesis for how you position yourself moving forward? I think that's exactly what's happening now, Morgan. First, in 2018, which Michael was talking about, First, in 2018, which Michael was talking about, the spike in the VIX or the collapse in investor sentiment or consumer confidence, that all happened around February 2018. So really that coincided with that first low that was made in 2018, and the market began

to stage its recovery. I don't blame any business or investor for saying look there's so much uncertainty. I can't make a decision I think that's why Rick Reader's talking about animals and hibernation But as we start to think about the second half of this year first of all We've already had the collapse in sentiment We've we've seen 850 billion of cash raised over the past year on money market balances. And then in the second half, we were looking for possibly tax reform, which really propelled stocks in 2017. So I think that the odds of a V-shaped recovery in stocks that come after April 2 is just extremely high because we've already sequenced a lot of the panic that people saw in

2018. I think it's already taking place. So what would you be buying right now? Well, to us, I think exhibit A for a V-shaped recovery is going to be Tesla because it's really been one of the most controversial stocks and it's been caught in that sort of political maelstrom of Doge and Elon Musk's involvement in the White House. And I think it's, you know, it's already recovered more than 15%. But I think if Tesla is leading us into this balance,

that's a bold case for Mag-7 to be the group to own in the next few months. So you like, so you like Mag-7, even though we've been talking about things like cash burn at Microsoft and all of the CapEx investments and worries about a bubble in AI spending? We've been talking about things like cash burn at Microsoft and all of the CapEx investments and worries about a bubble in AI spending. Yeah, I mean, in some ways,

it's been a self-amplifying downturn, right? Cause we've been worried about AI as a bubble and the core weave IPO at a time when we have tariff uncertainty. So I could see it as a very convenient reason why investors have actually avoided Mag-7 and it's been the group that kind of really led the downturn. But it is a cyclical trade too because I think once investor confidence returns and they're

going to start to buy stocks, the Mag-7 are not only the best companies, but they're the most liquid and they've really derated. On top of that, I think financials and industrials look attractive as well. What do you think it takes to see that reversal in sentiment? And we talk so much about when sentiment gets negative enough, it becomes a contrarian buy signal. So if we're there now, then what are going to be the catalysts to start to shift that confidence again?

Well, I think the focus right now is on April 2. So I think the market has a lot of myopia around getting tariffs and tariff clarity. But we know that tariffs are just one part of the administration's goal. There is reducing regulatory cost and then there is extending tax cuts. I think as investors start to think about that for the rest of the year, that gets them quite excited. And of course, I think we have a lot of about that for the rest of the year that gets them quite excited and and of course we have I think we have a lot of what I would call spooled energy, you know investors can't stay this bearish the Vicks can't stay this anxious

There is a lot of firepower and dry powder on the sidelines and I think businesses can't stay cautious forever I mean once they know know the ground rules. I think they're gonna actually start making decisions All right, Tom Lee, thank you. Thank you. Well don't miss Tom Lee and other CNBC pros from the New York Stock Exchange on June 12th for the first ever CNBC Pro live event. Scan the QR code on the screen or visit CNBCevents.com to get your tickets today. When we come back, we'll talk to an analyst about Lululemon's quarter and what she wants to hear from management on the earnings call,

which kicks off in just a few minutes. And we're still awaiting CoreWeave's IPO pricing. We'll bring you any details as we get them. Overtime, we'll be right back. Welcome back, Lululemon is falling in overtime after reporting earnings down about 6.5%, 7%. in a Telsey CEO of Telsey advisory group maintained her buy rating on the stock ahead of earnings with a $445 per share price target and she joins us now. Dana, I want to get your thoughts on this because they beat on top and bottom line. It looks like same store sales were softer than expected. Gross margin was better than expected expected but the guidance disappointing.

Got it and Morgan thank you for having me this is exactly what we've been seeing from a lot of the other retailers the fourth quarter comes in better and then your divorce from 2025 and the guidance one of the differences in the guidance that lululemon just posted they talked about a six to seven percent increase in sales in the first quarter and for the year a 5-7% increase. A lot of the other companies reporting need a big acceleration in order to be able to hit the guidance for the year. In addition, the guidance for EPS for the first quarter is still pretty decent guidance compared to last year. It's within the band.

It falls short though of the 272 consensus. And what I want to hear on the call in a few minutes, product newness, innovation, what's going to be driving that going forward. I want to hear about the improvement that they saw in the US. Is it continuing? Because you did have improvement in the US in the fourth quarter compared to the third. It's interesting too because some of the other retailers and apparel makers that we've seen take down their guidance have done so factoring in the possibility of tariffs but and correct me if I'm wrong Dana but Lululemon is not as exposed to those tariff dynamics based on where it manufactures at least according to where we are getting tariff policy right now. That is exactly right. They are not as exposed. It's a low percentage for them very minimal but we'll have to hear exactly what other costs are they incurring is there

anything with marketing is there anything with supply other supply chain costs like freight let's hear what it is and let's see how the business quarter to date in the first quarter is doing cuz that six to seven percent that they have is a pretty good number compared to the others. How much does China matter? I realize it's a market that's growing, but it's growing off of a very small base for Lululemon. That said, I've had a number of conversations with a number of CEOs and executives in recent days and recent weeks who seem to be very constructive now on the Chinese economy coming

back. Well, one of the things for Lululemon is they just did an investor day back in the fall showing what the opportunity is in China over there. So it's going to become an increasingly important part of their business as is international, which just delivered a 22% sales increase. Okay, Dana Telsy, thanks for joining me. Thank you for having me.

Well, it's time now for a CNBC News update with Julia Borsten. Hi, Julia. Hi, Morgan. Police arrested a 36-year-old Las Vegas cinematographer and accused him of throwing Molotov cocktails and opening fire on Teslas earlier this month. Jail records show Paul Kim was taken into custody yesterday and charged him with multiple felonies including arson and possessing an explosive device. The FBI says Kim will also face federal charges.

The Justice Department has vowed to treat property crime involving Tesla vehicles as domestic terrorism. Two Americans were among the five people injured today in a stabbing in the center of Amsterdam. Police say they arrested a male suspect, but have not determined a motive yet. They are not ruling out that he randomly targeted the victims. According to authorities, the American nationals who were injured are a 67-year-old woman and a 69-year-old man.

And the Sundance Film Festival is getting a new home. Organizers announced today the iconic festival will leave Park City, Utah for Boulder, Colorado in 2027. They say the festival had outgrown the small ski destination and the new location will give Sundance more opportunities to expand. I've attended many a Sundance. I'm looking forward to seeing the new location. Alright,

you have to report back. Julia Boriston, thank you. Breaking news from the Fed. Steve Leesman has the details, Steve. Richmond Fed President Tom Barkin speaking at this hour saying that a moderately restrictive stance from the fed quote is a good place to be But he talks a lot about uncertainty saying the Fed is well positioned to adjust if conditions shift The Fed is quote waiting for the fog to clear And he said sentiment, the decline in sentiment

could be quieting demand. Here's his quote that's, I think, the most important thing. He said, with all this change, a dense fog has fallen. It's not everyday forecasting is hard type of fog. It's a zero visibility pullover and turn on your hazards type of fog. He goes on to say, business is not pulling back, but they're not pushing forward either

because of the uncertainty. It's hard to imagine firms hiring in the current environment or hiring more than they are right now anyway. The number of large firms, he says, have warned about weaker consumer demand and credit and equity markets require stability, which it appears they're not getting. I don't know, Morgan, at some point it sounds like the fed is maybe talking to or even pleading with the administration for some clarity here. It does seem like it's the uncertainty maybe more than the policies themselves. That seems to be the message coming from Wall Street and from the economic community.

Steve, thank you. We know you're monitoring Boston Fed President Susan Collins who is a voting member this year as well. So any headlines from that? Please come back. Steve Weisman. Automakers falling today on the back of President Trump's presidency. I'm going to be monitoring Boston Fed President Susan Collins, who is a voting member this year as well. So any headlines from that, please come back. Steve Weissman. Automakers falling today on the back of President Trump's latest tariffs. But one group of stocks is jumping as a direct result of the announcement. We're going to tell you what that group is. And one of the biggest winners of 2024, Applovin.

Getting slammed today after a prominent firm said it was short the stock. We're going to discuss the details on overtime returns. Welcome back to overtime. Applovin was one of the biggest winners of 2024, but the stock isn't feeling the love today. Sinking after a prominent firm said it had taken a short position to see. Moody has the details for us. The stock closing down 20% today. Seema pretty sizable move. Morgan Applo down 20% today. Seema. Pretty sizable move. Morgan Appalovian shares under pressure, as you just said. Short seller Muddy Waters disclosing it is short the stock. In a research note, the prominent short seller

alleges that the mobile ad company is at risk of being deplatformed because of the way it runs its business and questions the company's e-commerce conversion rate. It follows two other short sellers, Fuzzy Panda and Culper Research going short the stock last month, citing what they say is fraudulent advertising tactics. Now, AppLevin CEO Adam Ferrucchi came out then calling those claims false and defending the company's practices.

AppLevin recently did deliver strong fourth quarter results. Many analysts, including Piper Sandler, coming out with bullish reads on the stock and the company's growth trajectory. So it's sort of setting up this bull versus bear debate. And it's become a favorite name in the retail community, Morgan, gaining 700% last year,

although now under pressure in recent weeks. Yeah, took on some meme stock like proportions last year. Sima Modi, thank you. And now Mike Santoli is back. He's got a look at manufacturing and employment as investors wait for auto tariffs to go into effect. Mike. Yeah, so Morgan, this is kind of the manufacturing economy

that we start with as those tariffs start to filter onto imports and then of course, with the long-term hope of maybe bolstering U.S. manufacturing. This is non-residential construction in total. That's this number right here. And then here's everything aside from data center construction. This is at an annual rate in billions. And you can see obviously, you know, the the chipsack, but even just the general AI investment trend has just rocketed this number. So these are manufacturing

facilities, technically, many of them data centers, but even non data center, you see there a lot of the infrastructure projects, a lot of things along with green energy has also lifted it above the recent trend. So it starts with a relatively hot manufacturing construction base. Now, take a look at employment. This is a very long term look at manufacturing employment totals in the U.S. and obviously very steep and long-term decline. Obviously you've had low-cost labor overseas, you have China entering the WTO.

But right here what you see is essentially kind of plateauing in this 12 to 13 million employees in manufacturing level, obviously plunged during COVID and now picked up. I guess the big question is, how much could you really expect this to go up in aggregate numbers? It's right now about 8% of total U.S. employment which, you know, again, has been kind of steady at this historic low for several years. Morgan. Labor's going to be a key

piece of this in terms of this idea of re-industrialization. Yes, exactly. Mike Santoli, thank you. Up next, the incoming CEO of Payments Processor, processor shift for tells us whether he is seeing any signs of slowing consumer spending And check out Oxford industries. This is the parent of Tommy, Bahama That stock is falling in overtime after giving soft guidance citing the impact of tariffs shares are down 7% And we're still awaiting core weaves IPO pricing.'re going to bring you those details once we get them. Stay with us. President Trump's tariff plans are not only weighing on stocks, but also on consumers as their confidence stumbles on financial concerns.

Joining us now is Shift4 president and incoming CEO, Taylor Lauber. Taylor, it's great to have you here for our first broadcast interview. And that's where I'm going to with you because Shift 4, payments processing, you have your hands into, you know, the processing of transactions across restaurants, hospitality, leisure, travel, e-commerce, gaming, sports. What are you seeing in terms of consumer activity? Yeah, we're seeing actually a pretty healthy

consumer environment. So as you mentioned, we see daily transactions at about a third of the restaurants in the country, about 40% of the hotels and an overwhelming number of sports and entertainment venues. It's largely been consistent throughout the trends of 2024. So I think a little bit of kind of the economic uncertainty that Wall Street might be worried about

is certainly not playing through in the consumers that we see every day. Just by way of example, opening day at Yankee's today, one of our great customers looks quite crowded. I'm sure commerce is gonna be great there. People still eager to get out and do things. So this drop we've seen in some of the consumer confidence and sentiment readings, it's not translating

to what people are actually doing in terms of opening up their pocketbooks. Yeah, we've seen actually throughout 2024, a little modest pullback in restaurants. I think people are thinking twice about what they spend on a night out, but not avoiding the night out by any stretch of the imagination. We've also seen continued robustness in hotels through the spring break season, which really only just began here in the United States. So we feel pretty good about the world around us. You've also been expanding into international markets, most notably

Europe. You just inked the biggest deal, $2.5 billion enterprise value deal with Global Blue just last month, adding to the portfolio here. What are you seeing internationally as you start to integrate some of these different pieces? We keep very busy, as you mentioned. International has been a huge priority for us for a while. But to give you a sense, we have about a 26-year history of running this business.

All but the last 18 months, we've been predominantly in the United States. We're in over 50 countries today, just 18 months later. So we're seeing incredibly strong demand on the merchant front. We've added nearly a thousand merchants in Europe in just the last month, by way of example, and we're seeing kind of increased demand for what we really specialize in, which is combining lots of pieces of the commerce value chain, the software, the payments, the analytics all in a cohesive box for merchants so that

they can get great insights and just simply run their business easier. What's interesting to me is the fact that some of these markets like Europe have been so fragmented and have been slower to adopt some of these fintech possibilities. Yeah and it's been interesting for us to watch as well. This is kind of one of the first things that Jared and SHIFT4 team, you know, pioneered 20 years ago, was this idea of combining these three cottage industries of software, hardware and payments and really eliminating three vendors

and delivering a cohesive solution to the merchants. So we've been doing this for 20 plus years in the United States. It's been kind of painfully obvious to us that the rest of the world could benefit from this consolidation. And yet it took us some time to get the building blocks there. But again, as I said, 18 months ago, we kind of completed one of the larger acquisitions in our history that gave us the payment processing capability. And the demand for merchants is immense. Like they're clearly signing up in droves for this simplification. And it makes obvious sense. And we mentioned it at the top of the show,

but you are incoming CEO, Jared Isaacman, founder and CEO is currently the, has been appointed to become the NASA administrator, although that confirmation hearing, we're still waiting on those details. What do investors need to know? What does Wall Street need to know about Taylor? And I guess just as importantly,

are you going to be as acquisitive? Great question. So not a lot of mystery in terms of how the business is gonna run. So while I've been at Shift4, this version of Shift4 for going on eight years now, Jared and I have been friends since we were 16. I worked in his parents' basement

when he first started the company. So I've had the privilege of watching Shift 4 grow, not only as a friend and as somebody on the outside, but also inside the company. So nothing to change with regard to strategy. I'm like incredibly thrilled that the world gets to see kind of Jared on a grander stage. His ambition is not something that's unknown to us. So the idea that they can see a little bit of the ambition that's lived inside of Shift 4 in a more public place is something that's a personal point of pride. But no, not a lot's gonna change.

We've found that our acquisition strategy is incredibly helpful. As payments and commerce continue to be fragmented around the world, we can take these really critical components and bundle them and make life simpler for merchants. And so we've had a 26-year history of doing this in the United States.

Despite that tenure, we grew revenue at 45% last year, and we did it profitably, 50% EBITDA margins on that 45% revenue growth, while we're acquiring businesses and making life simpler for the merchants inside of those businesses. Well, Taylor, Labner, I've shift four for it's great to have you here on set. Thanks so much. Well, investors slamming the brakes on auto stocks after President Trump announced 25% tariffs on car imports. But up next, we look at one part of the auto industry that's bucking the

sell off trend today, and we're still waiting core weaves IPO pricing. We're going to bring you those details once we get them. the sell-off trend today. And we're still awaiting CoreWeave's IPO pricing. We're gonna bring you those details once we get them. Welcome back. President Trump announcing 25% tariffs on auto imports last night. And while many auto stocks are getting hit hard, auto parts retailers have been rallying.

Phil LeBow explains why. It all comes down to pricing. Morgan, when you have vehicles likely to go up substantially in terms of prices being charged at dealerships, well, a lot of people are going to say, I'm hanging on to my vehicle longer. And that is certainly good news, whether you're talking about O'Reilly Auto Parts, Advanced Auto Parts, AutoZone. These guys are in the sweet spot right now. And look at what these stocks have done over the last week.

And again, they're surging in part because people are expected to hang onto their vehicles longer. And remember, the average age for a vehicle in this country, and this was last May, we'll get new data coming up in about a month, month and a half from S&P Global Mobility. The average age is 12.6 years. And it is expected to continue rising, at least for the next year or two. It may ultimately plateau, but the bottom line is people are hanging onto their vehicles

longer, and this is going to be driven further home by the fact that when you go to dealerships, perhaps later this spring, maybe this summer, the expectation, and nobody's quite sure how the tariffs will play out, but the expectation is that the average vehicle price will increase between $3,500 and $4,500. Now it may not be that much, and it may be that the automakers are able to offset this, or maybe ultimately when the tariffs go into effect, the impact will not be that great,

but that's the expectation, and that's the reason why people are gonna be perhaps taking care of their own vehicle longer. Finally, take a look at the auto dealer stocks. And the reason we're showing you this is these stocks were under a lot of pressure today. And a lot of people say, well, look, there's going to be fewer vehicles sold. That is true. But keep in mind the bulk of the profits and actually we're showing you the used automakers

here. The bulk of the profits for dealerships are made in servicing vehicles. So used autos are expected to increase as people sit there and say, I'm not going to pay more for a new vehicle, Morgan. Those are the winners that are perhaps at least initially coming out of this. OK, Phil LeBeau breaking it down for us. Thank you. Up next, former CNH industrial CEO Scott Wine.

Why President Trump is taking a much more rational approach to tariffs right now compared to his first term Welcome back market digesting today's auto tariffs and looking ahead to next week's April 2nd target date for the Trump administration's retaliatory tariffs announcement Joining us now is Scott wine a former ceo of cnh and polaris two companies with global supply chains including In china and scott it is great to have you on. You are the CEO of Polaris, which includes the Indian motorcycle brand and ATVs and all kinds of interesting vehicles during Trump 1. So you've had firsthand experience with some of these trade and tariff dynamics. Want to get your thoughts on what we should expect potentially here, especially as everybody seems to be so focused, maybe less on the details of the policies we get and more on

the fact that there's a lot of uncertainty around it and it seems to be a negotiating tactic. Well, good to be on with you, Morgan. My first thought is I'm glad I'm not dealing with it right now. It's certainly something I've still got a little bit of nightmares about. But you know, what I think is better this time around is just how good this administration is with Secretary Besen and Lutnick. These are really smart people advising the president.

I think we have to recognize there's an inverse relationship between what I'll call the fairness or effectiveness of tariffs and how the ease of implementation. So if you think about the auto tariffs, very, very easy to implement, but they're going to have a broad impact on people like my former employers and a lot of the automotives that worked within the guidelines of USMCA or NAFTA to set up their supply chains and now they're being severely impacted by this. On the other hand, the reciprocal tariffs that the administration's talking about, very hard to implement, but ultimately really is fair because, you know, what the

administration is doing very wisely, I think, is trying to reset the playing field where, you know, we've been charging much less tariffs to people importing to the United States than they've been charging us. So I think there is a fairness coming. There's likely to be some short-term pain as we work through this. Long-term, could it relate or bring us more manufacturing employment? Probably. Could it be better economically over the long-term?

Probably. But certainly, there's going to be some short-term pain because we can't build factories or fix supply chains in months or quarters. It takes years. Well, and President Trump said yesterday that these auto tariffs are permanent. These are not a negotiating tactic. I think about just some of the duties we've had in place for pickup trucks over the last, however many decades and maybe short term there was pain there, but it also changed

that supply chain. Yeah, certainly. But he says it's permanent and I trust what the president says. But also, the stated purpose is to, you know, get rid of fentanyl and to, you know, stop illegal immigration across the border. So if those things start to improve dramatically, we may see some, you know, targeted relief for certain instances. But, you know, the uncertainty is really causing some of the problems

and I think is more, the faster we get clarity around this, the faster companies can ultimately react and figure out their game plans. So we have less than one minute here. So quickly, your thoughts on China and trade dynamics with China. Well, China's very interesting. I think we've seen President Xi try to take a more hard, you know, strict

approach on that economy, and he's starting to loosen that up. How much he's going to loosen it up, I'm not sure. You know, I've had a couple of CEO friends of mine that were just over there and very encouraged by what they see and hear. So I think it's cautious optimism at this point. But you know, as much as we talk about wanting to separate our supply chain from China, we're so interrelated. I think that's going to be very difficult for us to do, whether you're in retail or

manufacturing. We've had a long period of time where we've worked closely together. Scott Wine, great to get your insights. Thanks for joining me. Thanks Morgan. Major averages finish the day lower. PCE on tap tomorrow. That's gonna do it for us here at Overtime.