Closing Bell - Closing Bell Overtime: 3/28/25

Episode Date: March 28, 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. Riverdance 30 ringing the closing bell at the New York Stock Exchange. Amber International doing the honors at the NASDAQ. Hard truths from hard data today as a hotter inflation print coupled with weak consumer sentiment sent markets tumbling. The S&P finishing down about 2 percent, pushing the major averages deep into the red for the week to reverse those gains That's the scorecard on Wall Street, but the action is just getting started. Welcome to closing bell overtime I'm Morgan Brennan John Ford is off today

We've got a big show coming your way former Fed economist Claudia song will join us with her reaction to today's potentially concerning inflation print And how it could impact the fed's? next moves. Plus T. Rowe Price tech portfolio manager Tony Wong breaks down the pain today in tech and what Coreweave's IPO says about demand for AI stocks. So that stock basically finishing flat today. And why one technician says we might be near an intermediate term low in the market and why he's sticking with a bullish year end forecast. We're going to be checking into the technical technicals here but we begin with this market sell

off more broadly as the rebound attempt this week has failed. Let's bring in unlimited at CEO and CIO Bob Elliott and Richard Bernstein advisors at CEO Richard Bernstein. It's great to have you both here on what is another down day and down week for the major averages. Bob I'm gonna kick this off with you because one of the conversations we've been having is the idea that so-called smart money or hedge funds and institutional investors are really selling here, de-risking ahead of the tariff April 2nd deadline next week and coming into quarter end

and basically sitting on dry powder. Is that what you're seeing in the data? Yeah, that's certainly right that what you see is hedge fund managers are really pulling back. I think the thing that's interesting is they came into the last couple of weeks with low conviction trying to get a feel as to what direction policy would go. And right now what we're seeing is we're starting to see a shift towards a more bearish sentiment looking at de-risking their equity portfolios, buying bonds, and most importantly, there's long gold as they've been in more than a decade. So apparently they've been listening to us

talk on Friday afternoons. Yes, and I'm gonna get into that too because we did have another record high for golds. You've been bullish on it for quite a while. But first, Richard, I wanna get your thoughts on the market here and the fact that we did breach some technical levels in the S&P as well as the NASDAQ this week and certainly pretty weak trading session here with a number of factors including inflation including you know tariff

uncertainty etc factoring in here. Right well you know Morgan it used to be that the word that we saw unprecedented use of was unprecedented. Now the word that we're seeing unprecedented use of is uncertainty. So I think, you know, the market is very simply, I think everybody knows there's uncertainty, right? And you can we could make a list of all the different sources of that uncertainty. And what's happening is a very normal process where the market is being revalued for a higher risk premium for US assets, right? The more what businesses need, what investors need is clarity and consistency. And we've been lacking both

clarity and consistency. So when you don't have clarity and consistency you want a higher risk premium. It's like a junk bond versus a treasury. You want a higher risk premium. And so that's what we're seeing so we've seen about four or five multiple points knocked off the S. and P. so far this year despite reasonably healthy earnings. And that's everybody reassessing for the uncertainty. Now you couple that does one more thing here you couple that with the notion that we entered the year with investors being historically confident about the future. If you look at, you know, Merrill Lynch showed that the private client beta was up to 1.7. Michael Hardin added, and Merrill pointed that out. I mean, that's tremendous amount of risk in a portfolio.

So people, what you did was you entered the year with people being incredibly historically confident, and they got socked in the jaw by all this uncertainty. I mean three months chart if I look here at the Nasdaq Bob and we're down 12% here for the S&P similar situation we're down 6% we know it's actually much darker than that if we look back at you know just a month and a half Dow similar situation. Meantime Treasury yields have actually fallen 10 year back below 4.3% we've seen a rally in Treasuries do you like that better the the most important thing is that we have a lot of policies that are pretty negative on growth.

Whether it's restricting immigration, the tariff policies, doge cuts, employment cuts, et cetera. All of that lines up with a much weaker growth picture ahead in those two areas. And I think that's a very important point. the tax policy, the tax policy, the tax policy, the tax policy, the tax policy, the tax policy, the tax policy, the tax policy, the tax policy, the tax policy, the tax policy, the tax policy, the tax policy, the tax policy, the tax policy, the tax policy, the tax policy, the tax policy, the tax policy, the tax policy,

the tax policy, the tax policy, the tax policy, the tax policy, the tax policy, the tax policy, the tax policy, the tax policy, the Fed is now being handcuffed. And today's data was such a good example of how challenging it's gonna be for the Fed to get ahead of this. When you have core PCE coming in at 0.4, when it continues to be up close to 3%, the Fed cannot move until there's a meaningful weakening of growth and they haven't seen it yet in the data. And so they're not gonna get ahead of this

the way that they had hoped to before. No Trump put in the market, no Fed put, at least for now, in the market. Richard, I mean, is this a buying opportunity here given the downdraft we've seen, or do you need to see more certainty? And if so, how does that certainty manifest to feel more constructive on stocks here? So Morgan, my answer to your question is it depends on what you want to buy. I think that everybody knows the world is changing except for technology investors.

Technology investors for some reason think that we're in the same world we were in a year ago or a year and a half ago. And clearly we're not. So I think if you're looking at an S&P index fund, I think if you're looking at the MAG-7, I think if you're looking at the tech sector, no, it's not a buying opportunity. I think if you're in companies that have more stable cash flows, I think if you're looking at dividends, I think if you're looking at quality around the world, not just the United States, sure, I think it is a buying opportunity. Okay. Richard and Bob, thanks for kicking off the hour with me. Thank you. Well, let's turn now, speaking of tech stocks, a brand new one, CoreWeave,

closing exactly flat in its first day of trading, sliding just a bit here in overtime. The name is seen as a bellwether for the broader IPO market and of course for this AI demand and AI trade. Christina Parts-Nevelis joins us with the latest. Hi, Christina. Hi, Morgan. Well, it's pretty impressive.

40 flat, which is still above the $39 opening price, but below initial expectations. Core Reef, for those that don't know, they rent out AI hardware, mostly GPUs, so customers really don't have to deal with that hardware hassle, especially all the software. And the CEO telling CNBC earlier today that they had to right-size the transaction based on buyer interest. What is that telling us? It's a tough market out there, and they needed to adapt. This was, like he pointed out, Morgan, the first big tech IPO in four years and really seen as a litmus test for appetite in the market,

not only for IPOs as a whole, but also a pure AI infrastructure play. The company, Corwee, went from making 16 million in 2022 to almost $2 billion in revenues just last year, which is impressive growth, although not profitable with looming concerns we talked about debt. But keep in mind, this is a growth startup formed back in 2017 as a crypto miner not too long ago. Earlier, maybe just a few hours ago, I caught up with Coriwee CEO and he reiterated that Coriwee's debt appears more manageable because it's systematically paid down through reliable revenue streams like Microsoft contracts, for example, which contributes two-thirds of their revenue.

The assets, secondly, such as GPUs, actually retain more value than everybody keeps talking about this decelerating depreciation or accelerating depreciation schedule. And then lastly, new major partners like OpenAI are really a vote of confidence in the company's long-term viability, aka they wouldn't do business with CoreWeave had they not done their due diligence and they're fully aware of all of their debt matters. So like you said, this IPO really does matter beyond just CoreWeave as its name, even though I'm sure everyone's really excited here. It's a temperature check though for pure AI infrastructure companies and more broadly shows us whether there's still appetite for tech IPOs. IPOs, well, markets remain pretty unpredictable as we can see by today. I mean, on a day where the NASDAQ finished down 2.6%, I think the fact that this stock

finished basically flat with its IPO price, which, mind you, I realize was lower than the initial range, perhaps speaks somewhat positively to appetite here. I mean, is that the takeaway here? And I guess just as importantly now, given you just gave us some context around, you know, chip depreciation and leverage on the balance sheet, is diversification to other customers really going to matter even more?

Oh yeah, 100% it's gonna matter matter no matter what, just going forward. Because if one company like Microsoft decides in four years the average life of a contractor of CoreWeave, if they decide, hey, we're not going to keep building out, then that's a lot of money gone out the window. But to your point here, everyone's quite optimistic about the growth of this company. Magnetar Capital was on Squawk Box, or Squawk on the Street earlier today, and they're a big institutional investor of CoreWeave,

and they said that this is the most growth they've ever seen in their 20 years working in this space. And so yes, they are giving out loans to this company, so they're highly connected and reliant on CoreWeave doing well, but it does speak, I guess, volumes to the growth of the company. It's just a matter of the debt level and all the building, the data center infrastructure,

and how valuable that is, you know, five, ten years from now when supposedly everything is going to get, the compute is going to get more narrower and narrower and we need less hardware, but we'll see about that. We'll have to see where we're at with this name in five years given some of those contracts. All right, Christina Parsenevelis, great reporting today. Thank you. Thank you, Morgan. Speaking of tech, it's been a brutal quarter for the sector. Magnificent seven stocks are down 14% so far this year. So what does that mean for tech returns moving forward? Well, let's ask Mike Santoli. Mike? Yes, Morgan, and I will ask history as tabulated here by Ned Davis Research. This is during years when in the first quarter the S&P technology sector has underperformed

the broad index by at least four percentage points. Right now we're about to close the first quarter and S&P tech is down six or seven percentage points more than the S&P. So obviously we're going to qualify this year. So here's the end of the first quarter. This is the blended average of all of those prior years when you've had such a rough start to the year for tech. And what you see, obviously, is more relative weakness. Now, this is the tech sector relative to the S&P. So it doesn't mean that on average you've had negative returns for the rest of the year, but it suggests

that technology itself has not historically sort of picked itself up and sort of led the market again after a rough first quarter. So just one of those guidelines out there to suggest that maybe this rotation we're seeing this year. By the way, you know, growth into value has been a big theme

even though it seems like the market in general has had a rough time. Value stocks, equal weighted S&P as well as dividend stocks have actually held up reasonably well, mostly hold their value so far this year.

That's exactly where I was going to with my question, Mike, and that was if tech doesn't typically historically hold up, what does, does it speak to a broader rotation in the market? It probably suggests a broader rotation. I think the tricky part is that tech is so big within the index and the other stuff that's had a hard time working you know I mean consumer communication services has been fine financials have kind of hung in there but the question right now is if you just look at where the outperformance has been it's been like precious metals utilities little bit in financials energies had a decent run collectively they don't really amount to a huge chunk of the index.

So that's the reason I think that the overall index flows have struggled and the fact that it's tough to see how you really have a big up year if in fact, tech and related stocks are on the sidelines. Okay, Mike Santoli, we'll see you later this hour with the S&P and Nasdaq both on pace for their worst months in September of 2022 and both on pace for their worst start of the year since 2020. Well meantime, weak data today adding pressure to this market and piling onto this theme of uncertainty.

So consumer sentiment worsened as inflation fears grew, and the Fed's key inflation measure came in higher than expected this morning. PCE. Joining us now is Claudia Somme. She is the chief economist at New Century Advisors and a former economist at the Federal Reserve. And Claudia, it's always great to have you on. So definitely want to get your takeaway from the data, the disappointing data we saw today,

especially in light of all the debates we've been having around soft versus hard data. Yeah, this is tough. You know, on the inflation data, it was yet another month that underscored a theme that frankly has been with us for several months, if not the past year, grindingly slow and uneven progress towards 2%. And I think then we also remember we are in the early innings of what could be inflation picking back up. Today's inflation data might count as a good day when we get later this year. So I think that's what's also really disappointing

is before a lot of these policy impacts are in place, we have inflation looking pretty weak, the consumers, I'm sorry, inflation picked up looks, you know, strong. The consumer spending did not have the pop in February we were hoping for. So it's like you have a setup that isn't good. And then I think it's very rightly so that consumers look at this, business look at this,

and you ask them, what do you expect for the rest of this year? And you do not get very positive answers back. I mean, we got the FOMC meeting last week. And the big thing that came out of that essentially was the SEP and the dot plot and the economic forecast. And as our own Steve Leesman has pointed out, what you saw if you read through some of the decisions that went into some of those forecasts

is a tilt towards perhaps rising risks of stagflation. Are you in that camp? Absolutely. That jumped out at me first thing in those summary projections. Normally when you do a forecast, and each Fed official gives us their baseline forecast for this year and they were maybe had a whiff of stagflation right but very minor they're really pretty optimistic forecast and yet when you get

down and ask them like oh how do you feel about the forecast they're like well we're really uncertain not pandemic level uncertain but really uncertain and it's like okay so you think you might be wrong which way are you going to be wrong and And it is all so shifted towards, we're going to be wrong with stagflation, lower growth, higher inflation, higher unemployment. And that skew, that imbalance, that was the highest level that's been in those forecasts since they started in 2007. Normally, you'd move your forecast in that direction if you think you're going to be wrong that way. So yeah, it was, that was a pretty downbeat picture. And I think the feds speak, the officials that have been out since the meeting have underscored that pessimism. And we've certainly had quite a bit of feds speak, not only today, but all week. Muslim in

particular a couple days ago getting a lot of attention for some hawkish commentary around tariffs and the potential impact there. So if we have an administration that's cutting government spending, or at least attempting to, if you aren't a Fed that's printing money right now, doesn't that help to ensure that any inflationary bump that we do potentially get from tariffs and shifts in trade policy, doesn't that help to ensure that it is in fact transitory to use the word that Pala used last week? So the tariffs have this

stagflationary impulse. We talked a lot about how they could raise prices for consumers. They also cut into inflation adjusted income because those prices are higher. So in some ways that does some

of the feds work which you normally do with raising interest rates because right? Because you've got less growth and that can hold back the inflation. It's a setup where the feds tools aren't, I mean, they can respond to this, but they're not really well set up for a stagflationary environment. But that absolutely is the question about, you know, but they could do harm, right? If they the inflation is not the outcome that the fed or anyone else wants either. So finally looking to next week we get a jobs report next Friday and a lot of labor data leading up to it.

What will you be watching for given this macro backdrop? So I think as with a lot of as with the consumption inflation data today we probably have a lot of things to look at. what will you be watching for given this macro backdrop? So I think as with a lot of, as with the consumption inflation data today, we probably will get some hints of worse data to come. There have been some federal government layoffs, there have been some contract cuts that will probably make some imprint in the jobs data,

but we are very much in early innings on that process. And so, we're getting a hint of what is to come, but we certainly shouldn't take a lot of comfort if, oh, it looks like a good month because these policies that we know are coming, we don't have them in the data yet. Okay. It's always good to get your thoughts on all of this for a variety of reasons, not the least of which is the fact that you are also the creator of the SOM rule, which Wall Street watches very closely. Appreciate all the insights,

Claudia Psalm. Thank you. Thank you. Well, coming up, tech's attempt at a rebound fell apart today. As the Nasdaq finished the week lower by 2%, we're going to talk to T. Rose tech portfolio manager about whether the end of the selling pressure is near and later why one technician is sticking by his 6,600 year end price target for the S&P 500, even in the face of all of this. Yep, I'm gonna say it, uncertainty. Over time, we'll be right back. It was an ugly end to the week on Wall Street with the Nasdaq feeling the most pain today.

Let's get to Steve Kovac with a look at the sell off in big tech. Steve, at least it's Friday. But look, the tech heavy Nasdaq was hit worse than those other indices. Like you said, let me run through some of the names, though, within big tech that really had some painful days today here. Apple falling to two and a half percent already subject to those 20 percent China tariffs. Also, some fears around consumer sentiment. It's still unclear if Apple is gonna have to raise prices amid all that.

Microsoft, in the meantime, falling 3%. And we had those recent reports this week that it's scaling back its AI buildout. Now couple that with Alibaba Joe Tsai's warning on the data center bubble, and you got a bad picture there. Nvidia, it's the same issue here. Not down as bad as Microsoft though, 1.6% today. Those data centers, of course, rely on Nvidia's chips.

And for a look at what the market thinks of the consumer and ad market out there, look at Meta, Alphabet, and Amazon, all of them, Morgan, down about 4% or better. Alphabet, the worst of the bunch, Morgan. Okay, Steve Kovac, thank you for more in this tech sell-off Let's bring in T Rowe price portfolio manager Tony Wong Tony It's good to have you on a day like today where we have seen this incredible pickup this whole month

Actually, we've seen this incredible pickup in volatility particularly in tech stocks and particularly in the Nasdaq The fact that we had another 2% drop the Nasdaq composite today was the fifth decline of 2% or more, according to CNBC's Robert Hom. This month it's the highest number of 2% declines in a month since June of 2022, and we know how bad that month was. That was down almost 9%, looking back almost three years ago. Your take on what we're seeing in tech right now, whether it's a buying opportunity or whether you have to sit on your hands

and wait for some sort of positive catalyst here. Yeah, well, I think that, you know, bull markets generally require conviction and then bear markets require restraint. So I think that we're kind of in that the market is trying to figure out whether this is a buying opportunity. And I think if you take a longer time span look, like you see the growth and momentum

factors have been really strong over the last couple of years. And so we've had two really big years of tech. And so I think there is some type of digestion and like debate here. And so I think if you look at valuations, they aren't at a place where you would say there's compituation. I mean, stocks are still going down on bad news. And so I think that it's going to just take some time to work through. And numbers, when you look at them, like haven't really been called down yet. And so I think a lot of the correction is is perhaps a little bit of rotations, evaluation, and then just recognition we've had two really strong years.

And a lot of that has been the AI infrastructure build out and the multiplier effects it has throughout the market and the economy. Do you, what do you think of these Joe Tsai comments about an AI spending bubble? And I asked that knowing that Bespoke this week also put out a really interesting chart showing how closely the release of chat GPT versus

the release of Netscape continues to track for the Nasdaq. Yeah, well, I think that, you know, it's natural for a company to question, you know, how sustainable the spend is. At the same time, I think Alibaba is also spending record amounts of capex to buy compute. And so, you know, I think that compute will always be valuable. I think that we are just debating where we are in the cycle. But I do think DeepSeq has a combination of, you know, more nuanced impacts. I think on one hand, it reduces, you know, kind of compute, you know, in terms of inferencing and optimizations. But on the other hand,

it dramatically increases the market. And so you're seeing a lot of companies that didn't have the capital get in the market and start training and experimenting. And I think that we will have these cycles and long-term I think you always want technology to reduce its costs in order to be more attractive. So I think it's,

I don't think it's one way or the other necessarily that it's clear. I think the market is just, you know, thinking about, you know, a few cycles, the AI cycle, and also the macro cycle as well. What do you think of the CoreWeave IPO in this first day of trading? Is this a name that you would buy?

Yeah, I think that CoreWeave has done a few different, a few really impressive things. One, they have gone straight to the bare metal and have a very lightweight software that is more designed for AI. And so I think that's pretty impressive. They're able to drive performance. I think they claim 20% better than the hyperscalers. And then number two is I think they've been able to pioneer this financing that's backed against the GPU.

So I think that those two combination things has allowed them to grow really quickly. I think that the market here is just debating on like what is that value of the GPU clusters worth in years five to seven? And I think Corwee's bet is that there is gonna be a long run time for these GPUs and they are willing to build it out.

And that's a significant asset there. Tony Wong, great to have you on. Thank you. Thanks. It's time now for CNBC News Update with Pippa Stevens. Hi Pippa. Hey Morgan, Charlie Gervais has been found guilty of defrauding JP Morgan Chase

into buying her college financial aid startup, Frank, for $175 million in 2021. The jury's decision today comes after a five-week trial in which prosecutors accused Javis of exaggerating the number of users on the service. Sentencing is set for August, but Javis is likely to appeal the verdict. A U.S. appeals court said today that the Trump administration can remove Democratic members from two federal labor boards, handing the president a victory in his efforts to gain control of independent federal agencies. In a 2-1 ruling, the appeals court for the District of Columbia said Trump's removal of Democrat-aligned board members at the NLRB and Merit Systems Protection Board would stand

for the time being. And the FCC has notified Disney and its ABC unit that it's investigating the company's diversity, equity, and inclusion efforts. In a letter dated today, the FCC wrote, the media giant's diversity efforts may not have complied with FCC regulations. FCC Chair Brendan Carr has also launched similar investigations into Verizon and CNBC's parent company Comcast. Morgan, back to you. Alright. Epistevans, thank you. Lululemon sinking to the bottom of the S&P 500 today as concerns emerge about consumer spending.

Up next, we're going to talk about that move and the split between discretionary and staple stocks. Plus, uncertainty is the word of the moment, in case you haven't already figured that out. It goes for a company's prospects in China as well. So we're gonna discuss what China's president said to reassure American executives today in Beijing. And one positive note this week for the bulls, Tesla just snapped its nine-week losing streak,

despite falling today, finishing week for the Bulls. Tesla just snapped its nine-week losing streak despite falling today, finishing higher for the week for the first time since President Trump took office. We will be right back. Welcome back to overtime. Today's economic reports did very little to calm investor worries. Let's bring back Mike Santoli for a look at the data point driving those concerns. Mike. Yeah, Morgan. So this is on the growth side. This is the consumption number that was within the PCE report. Personal consumption expenditures. This is adjusted for inflation. You can see there at the end the last couple of months you've taken that turn lower below three percent at an annualized rate. Now we've been around these levels before, the last couple of months, you've taken that turn lower, below 3% at an annualized rate. Now we've been around these levels before in the last couple of years, not a big deal, but with inflation having come down now to around 2.5% at the headline level, it shows you nominal GDP growth is well lower and a cautious turn by investors because incomes have continued to grow reasonably well.

That might be a silver lining at some point. And this, by the way, is why a lot of the Wall Street economists were downgrading their first quarter GDP numbers today. This is the number that feeds into gross domestic product. Now look at the way the market's viewing it. I mean, consumer discretionary over staples has been a pretty consistent theme for some time. You see starting like in the summer of last year, took flight.

This is discretionary right here on an equal weighted basis. And they've been collapsing toward each other, as you can see here. And not because Staples doing anything special actually, because some of those consumer goods companies are also saying consumers pretty cautious right here. They're not having pricing power. They've got problems with GLP ones and all the rest.

But right now it's kind of hanging in there just barely. This outperformance of discretionary over staples, which is one of the macro messages you like to listen for as an investor. And we're talking about it before the break. Lululemon having, you know, a double digit drop today was one of the worst performers because in part because of this drop today in the S andP for the entire week Softer guidance and basically they're talking about a softer consumer spending appetite particularly in North America How much do we read into that especially as we've heard conflicting?

Commentary from quite frankly some of the other retailers and and some of those other consumer facing companies most notably They're on the services side of the equation. Yeah, I think the market is taking it as confirming that especially the more discretionary the item, maybe the more difficult they're having it. Also, the fact that Nike had such a bad quarter and lousy guidance, and it was not netting to the benefit of the likes of Lulu, which is still not a super cheap stock,

I think is one of the reasons for concern. The companies just don't have a lot of confidence in trying to reassure, with the exception of things like the cruise lines, which are saying things are fine. I was noting the travel and leisure ETF, that's PEJ, it's down like 16% in six weeks. That was a very strong area,

but to me that's very linked with these consumer sentiment surveys. It's very easy if you're just not feeling very confident about how things are going, sort of not to take the next trip. It doesn't mean that the market has it right, that things are going south in that area on a sustained basis, but clearly that people really need to be reassured

at some point with the incoming data that the consumer's gonna hang in there. I wonder if this is also just post-pandemic normalization to a certain point. And, yes, it's taken a couple years. And weather and all the also just post-pandemic normalization to a certain point. And yes, it's taken a couple years. And weather and all the rest. Exactly. All right, Mike Santoli, thank you.

China's president urging global CEOs to protect global trade. As the country makes a play at appearing more friendly toward business, we're gonna talk about what that means for companies and for investors in China next. And later, a top market technician on why today's sell-off could mark an intermediate term bottom for stocks.

Stay with us. Welcome back to overtime. Uncertainty is the word at the moment and that includes corporate uncertainty about doing business in China. Well, Beijing unleashing a charm offense aimed at the international business community. President Xi Jinping meeting today with American CEOs from FedEx, Pfizer and Qualcomm, as well as the heads of global giants, Samsung, Toyota and others. Well, Chinese indices were mostly lower for the week, although those markets are handily outperforming the S&P 500 so far in 2025. Joining me now is Strategy Risks CEO, Isaac Stonefish and BlueShirt Group Managing Director, Gary Dworczyk.

Isaac's firm specializes in China risk assessment while Gary leads BlueShirt's Asia practice supporting US listed companies from the region gentlemen It's great to have you on for what I suspect to be a very robust discussion here So Gary, I'm gonna start with you because yes, we had CEOs in China meeting with she and other officials this week We also know we have all of this trade policy and tariff talks swirling in the background As we look to April 2nd next week and we've seen other things, you know, other duties implemented in the meantime.

So what does this mean for U.S.-China relations and the companies caught in the middle? Well Morgan, thanks for having me on. The meeting today, I want to take a few seconds and put it into some context. And that is that the Chinese government has very few options now to stimulate the economy. China's in a depression. There's absolutely no doubt about that. And they're also in a pretty nasty bout of deflation right now. So everyone knows real estate values are down, but everyone is getting pay cuts across the board.

I live there, right? So I talk to business owners, talk to people, everyone's salary is being cut, businesses, their volumes are down. So everyone is really struggling just to make ends meet and to keep going. And so the standard playbook for the Chinese for economic recovery or growth is exports, right?

And that would have been tough under any circumstance, but now with the tariffs looming, that exporting your way back to growth and a more robust economy is gonna be very difficult to impossible. So they need internal consumption to pick up the slack. And how do you get that when nobody has any money uh... you know but prices need to go down just a two-ton uh... create some

stimulus and so i think the chinese government rightly is looking at every single option you know we saw shi jim ping met with jack ma a couple weeks ago he's trying to show the love to the the domestic tech industry uh... which hasn't been feeling it as much the last few years, and they really need the tech industry to revive, and you need external investment, right?

So you need these companies to up their game in China and make more of a commitment because they don't have a lot of other choices. Yeah, the meeting with Jack Ma was particularly notable to me a couple of weeks ago, very symbolic, given the dynamics with Jack Ma was particularly notable to me a couple of weeks ago, very symbolic given the given the dynamics with Jack Ma in recent years and the fact that he sort of fell out of the public eye. Isaac, how are you advising clients and companies right now given all of these dynamics swirling

in the background? Companies are trying to stay out of the spotlight. They don't want to have a target on their back from Trump or from Chinese chairman, Xi Jinping. And so usually that means making sure what you're doing in China isn't going to raise eyebrows from what Trump wants, but also secretary of state Marco Rubio, national security advisor, Waltz, the issues that they might have with certain American companies and global companies'

performance in China. For President Trump himself, it's a lot more on, I want to make sure companies are investing in America. I want to see those big top line numbers. Companies are understanding that. And so they're spending money or claiming that they will be spending money in the States. We saw that with Apple. We saw that with TSMC. I'll just add,

I was very surprised that Apple made its $4 million donation to Zhejiang University, like basically every university in China that is a school that is owned, operated, and overseen by the Communist Party, and that that got very little attention in the debate. But it seems like those types of partnerships with the communist party are still today seen as normal. I'm glad you brought that up because I don't think that's something that most people realize is happening with a company like Apple in China. Gary, given what you just highlighted in terms of the domestic situation in China, economically speaking right now, when you do start to think about trade and tariff dynamics with the US, what does this look like potentially then

if you start to see higher and higher tariffs implemented by the US, when you think about retaliation from China and when then, I guess when you also layer on this national security component too, I mean we had more names that were added to the export control lists here in the US this week. Yeah. Well, that's a great question. I mean, I'm in the camp that

the tariffs are more of a negotiating tool, so I don't think that they're going to be permanent. But how many points of leverage do we have in negotiating with our trade partners? Right, so tariffs are very strong one that can be used and I think what we're seeing early on is the fact that we kind of have to prove that we'll do it. Otherwise, you know, is it just empty talk? And so so there's gonna be a lot of tough negotiations, a lot of what will happen with the China with their government and with their trade policies is going to move more towards an equalization. So as an example, this idea of having TikTok

become owned by a joint venture, I don't know how many of you viewers know this, but all American, actually all foreign companies are doing business in China have to do it through a JV, right? And this has been a huge sticking point for years because they form these JVs and then the Chinese partner kind of learns how to do the business. And all of a sudden, you know, JVs often fall apart, not always. And it's a huge sticking point. And we want access to the Chinese market without having to partner with the Chinese company. Now, TikTok comes along. And it's like, all right, turnabout is fair play. So I think you're gonna see a lot of trade negotiation

with the goal being to open up the Chinese market to more of our companies. We won't wanna have a lot of their companies investing in the US. This is a problem for China because, you know, if a big Chinese company builds a plant in America, it doesn't create jobs in China, and that's what they need. Okay, quickly, Isaac, wanna get your thoughts on TikTok since that ban is supposed to go into

effect a week from today. And we know the president has already dangled it as a possible negotiating tool. I don't see any way that that works out. I don't see the U.S. and China being able to make a deal over TikTok. I'd be very surprised if that's what Trump decides to use, where the leverage that he has, he expends on doing a joint venture with Tech Talk. And I would just say, on Gary's great points there, it's one of the reasons why the Chinese economy is so much more closed than the American economy.

There's a lot of struggling American companies that have to have joint ventures with Chinese partners that they would much rather not have. Isaac Stonefish and Gary Dvorak, thank you both for joining me. Thank you. Stocks selling off again with the S&P and Nasdaq on pace for their worst months in nearly three years.

But coming up, we're gonna hear from one chart expert who thinks investors could be missing out on a big buying opportunity. Plus, media stocks taking it on the chin in today's sell-off. We're gonna talk about why names like Netflix and Roku fell so much. Welcome back to overtime is a rough day on wall street for the bulls and media stocks were hit especially hard. Julia Borson has the details. Hi, Julia.

That's right, Morgan. Media stocks falling on fears of higher inflation and a possible recession, which could not only impact consumer spending on the likes of subscriptions for streaming services, but could also impact the ad industry. Marketing budgets can be the first thing to go in an economic downturn. Now, shares of Warner Brothers Discovery were hit hardest today, down nearly 6%. Despite that, stocks rise over 20% in the past six months. Roku shares down nearly 5%. Netflix down over 4%. Disney holding up slightly better

than some of those other names, down a little bit over 2%. Bank of America was out with a note today reiterating its buy rating on the stock, but noting that macro uncertainty does add an element of risk when it comes to Disney. Now, there's another headline out this afternoon about a social media player. Blackstone is evaluating taking a minority investment in TikTok's U.S. operations, according to a Reuters report. Now, Blackstone is reportedly discussing joining ByteDance's non-Chinese shareholders

led by General Atlantic and Susquehanna. And on that news, social stocks also getting hit hard today. Meta and Google both down dramatically. Meta down 4.5%. Alpha down nearly 5%. Snap off 3. And Pinterest off about 2.5%.. Morgan. Okay. Julia Borsten, thank you. I'll be watching for TikTok headlines as we do approach that deadline next week. Meantime, shares of Rocket Lab bucking the downtrend today, finishing up 1 percent, up 350 percent over the past 12 months.

Now, this after the US Space Force tapped the company to join the National Security Space Launch Program, part of NSSL's Phase 3 Lane 1 category. What this means, well, Rocket Lab, as well as startup Stokes Space, are allowed to compete for launch contracts worth billions of dollars over the next four years. Launch One programs as a whole

are appropriated $5.6 billion, and Rocket Lab's CEO and founder, Sir Peter Beck, tells me that this ward is quote actually really significant. There's a very very small number of providers that can compete for the for the various contracts over the next few years to deliver the spacecraft so it's kind of like riding an elevator to the very top floor to an exclusive club. You have to earn your way up there floor to to an exclusive club. You have to earn your way up there but but but now you know you can you can compete for for those projects. Now that so-called exclusive club also includes SpaceX, Blue Origin and United Launch Alliance all green lit by the pentagon to potentially transport the

most sensitive national security payloads through the rest of this decade, through this NSSL program. Now for Rocket Lab, it represents a big opportunity for its new medium lift neutron rocket that's currently under development and exponentially more powerful than the company's current workhorse, Electron. There is a slightly unintended monopoly within medium class launch right now.

So there are really no other viable alternatives. So Neutron looks to squealy kind of address that. And then for our own purposes as well, I mean, everybody knows Rocket Lab very well as a launch provider, but two-thirds of our business is in fact building spacecraft. So what we're trying to build as a company is really this end-to-end space company where customers can come to us. We can very easily build their spacecraft.

We can launch it for them, and we can even operate it for them. So Neutron is kind of the final league of the stall that enables us to build that end-to-end company. Well, Beck says Neutron is still on track to make its first flight later this year. Rocket Lab needs one successful launch to be certified for these future national security missions. For the full discussion, check out Manifest Space.

You can scan that QR code right there on your screen or download wherever you get your podcasts. Up next, much more on this market sell-off when we hear from a top market technician on why now may be the time to jump back into stocks. Stay with us. Well, big sell-off pushing markets sharply lower on the week, adding to the losses on the quarter. But it is time to jump back into stocks, is it? Well, joining us now is Craig Johnson. He is Piper Sandler's chief market technician. It's great to have you on today, Craig, especially given the fact there has been so much focus here on 5670 for the S&P and this notion that if we broke below that, we could fall further. We did today. Your thoughts now from the technical side. focus here on 5670 for the S&P and this notion that if we broke below that we could fall further. We did today. Your thoughts now from a technical standpoint. Thanks, Morgan, for having me on and

happy Friday, everyone. So from our perspective, as we look at this market, yes, there's been a lot of damage that's been done. But Morgan, on these kind of pullbacks that you get when they're on extremely light volume, that's kind of what you call as a retest. And on a low volume retest is actually something that technicians are often looking for. On the S&P 500, we weren't even 20% of the 30-day average volume. And you look across all the exchanges the same way. There's just no buyers out there. Everybody's frightened about tariffs. Everybody's running from this market thinking that they're punishing, you know, companies out there, they're stepping back and you're watching markets just sort of come in under their own weight and this creates the opportunities Morgan, that's a buying opportunity. If I

go back and I look at sentiment measures, breath measures, I go back and I look at historical sell-off levels, we're kind of reaching these extremes, Morgan, is where I sort of step up and say, from the old Warren Buffett quote, I want to be greedy when people are fearful, and fearful when people are greedy. We're kind of getting to those levels we've seen before, Morgan.

And of course, we know we're gonna have tariff news next week. It's also one more trading day to the end of this quarter, so maybe some rebalancing to your point. Maybe a sell the rumor, buy the news type of dynamic when you look to next week I wonder if you think that's what's playing out the bond market when you

look at something like the ten year treasury yield as well. Yeah I do think that is the case I mean certainly some of the economic data that came out today was probably a little warmer than people expected but sort of seems to be

directionally working in the way that Paul has been talking about. And you saw ten year bond yields off materially today. But our view if we extrapolate out the trends Morgan is a ten year bond yields could be trading

closer to three fifty by the end of twenty twenty five ultimately I think that would be very constructive for equities. Especially mid and small cap equities. And from that perspective. We think this is sort of setting equities up

for a nice move higher. We have about a minute left here so quickly. The fact that the Nasdaq 100 fell below 20K this week, it finished down today at 2.6%. It's lower on the week as well. How much does that matter here, especially given some of the pain we've seen ongoing in the mega cap tech names?

Well, Morgan, the MAG-7's going to dominate that particular index was driving the market higher and ultimately we're starting to see those companies become sort of laggards the relative performance the absolute performance and they're sort of masking a lot of pain that's happening from underneath the surface. Do they matter absolutely wonderful companies but they're probably probably not gonna be great stocks for a while. So I've been telling investors to sort of look down cap and mid cap land, small cap land for some better opportunities,

especially with the interest rates coming down and the Fed likely to cut a couple of times in 2025. Okay, Craig Johnson, thank you. Of course we do get President Trump's plans on reciprocal tariffs. We get US jobs data, We get ISM manufacturing services, ISM, and a number of other key data points when we look to next week. Stocks, major averages finished today lower, and we're actually off to our worst start

for the S&P and the NASDAQ since 2020. That's going to do it for us here at Overtime. Fast money begins right now.