Closing Bell - Closing Bell Overtime: 5/9/25

Episode Date: May 9, 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.

Is the end of regulation on a Friday. Intercontinental Exchange, the New York Stock Exchange's parent company, ringing the closing bell at the NYSE. Wagner College School of Nursing doing the honors at the NASDAQ. Major averages in wait and see mode for most of the day. The S&P 500 finishing right near the flat line on a one day basis and even for the week down about one half of one percent. Key trade talks between the US and China this weekend the most sectors finishing today in the green

just barely that's the scorecard on Wall Street but the action just getting started welcome to closing bell overtime of Mike Santoli Morgan and John are off today coming up this hour Tesla finishing up the week on a high note closing out its third week of gains in a row as hope builds around the benefits of trade deals. Former Ford CEO Mark Fields will join us to discuss what's really driving that rally. Plus a rare interview with the Amazon's head of Prime Video, Mike Hopkins,

as President Trump threatens tariffs this week on foreign-made films. Let's now get straight to the market action. Joining us now is CFRA research chief investment strategist, Sam Stolval, and aerial investments vice chairman, Charlie Babrinskoy. Guys, good to see you both. Thanks a lot for joining me here.

Sam, it's an interesting spot. The market finds itself in a little bit of a crossroads, right? We had a near bear market or a severe correction. About a month ago, we start rallying. We kind of regained more than half of it. Now, some bear market rallies can be this strong, but maybe not all of them. So how are you thinking about the environment

and what the market has told us this week? Well, you brought up a good point, Mike. Good to see you again, first off. Basically, about two out of every three bear markets since World War II did have a very strong bear rally and actually got within 2% of the 200-day moving average as we are right now. Some even went above the 200-day moving average only to then turn around and set an even lower

low. Even if we remain in correction mode, which is 10% to 20%, 42% of those times since World War II, we did end up with a similar reach to the top only to then end up heading a little bit lower before all was said and done. And so are you leaning in one direction or another based on the weight of the evidence so far in the market, Sam? Well, I bring this up simply because of the possibility that the market could turn around and head lower. But our Lowry research, which is our technical analysis arm, is indicating an increasing

amount of demand relative to supply. And as a result, their belief, which goes along with my thoughts, that the market will continue to work its way higher. And Charlie, I mean, I guess the one reason the market's been able to make up some of this ground, obviously there's some kind of hope for de-escalation on trade, but also the economy as far as we can measure it, seems like it's steady for now.

The Fed this week essentially said they don't see a particular emergency to respond to, either on the risk to growth or inflation right now. How are you reading it and did this correction surface much opportunity for you? Steady is an interesting adjective. I'd probably put wobbly. I'd say one-year-old toddler trying to take his first steps. What we're hearing from our portfolio companies is a consumer that doesn't feel great, that's not real optimistic. The job market is OK, but outlook for the economy and inflation are not so great.

We of course did have one negative quarter of GDP growth. I would say we have a market that's trading at above average multiples. Everything except for small cap value is above its 20 year average in terms of PE. I would call the macro environment below average, higher than normal expectations of inflation, the Fed probably not going lower that we all thought they would four months ago, and the economy below average. So I think it's a modestly expensive market without a great outlook. OK, yeah, that would suggest not the greatest risk reward

given that really S&P is only down 4% year to date, even with all the volatility. Charlie, Sam, stay with us for a minute. Let's just get to Eamon Javers now in Washington with the latest developments on trade today ahead of high-level talks this weekend with China. Eamon. Hey there, Mike.

We are waiting for hour by hour details of the schedule for the weekend with Treasury Secretary Scott Besson in Switzerland for a meeting with the Chinese delegation. Obviously a lot riding on that. The president said yesterday that these will be significant discussions. He says we're not going to just have a meeting to have a meeting, so we'll see what kind of breakthrough, if any, they're able to make over the weekend. But as we watch that trade negotiation for the details on China, a lot of people around the world are watching it also as a baseline for whatever else is happening, given that we saw this deal yesterday with the UK.

Keep that 10 percent baseline figure in place for tariffs for the UK. The expectation here now is very much that 10 percent is sort of a universal baseline across the board. White House press secretary Caroline Levitt said as much in the press briefing today. Here's what she said. The president is committed to the 10 percent baseline tariff not just for the United Kingdom but for his trade negotiations with all other countries as well. So as much as the president said, 80% sounds like a good number to him on social media earlier today in terms of tariffs with China.

10% seems to sound like a good number for him in terms of tariffs with the rest of the world. And the question is, you know, how does that impact global trade? 10% seems to be a level where importers can still make money. The question is, with China, is 80% a number where they can still make money or does the number have to come down from there really to allow significant trade between the United States and China? Mike?

Yeah, Eamon, thanks very much. Everything sounds like a pretty high level, Sam. At this point, I mean, if you're talking about the China tariffs, 145, everyone agrees, unsustainable. That's basically an you know, an embargo. 80, I mean, I don't know if that sounds much better. What's your sense of what now is roughly priced into the market, aside from the general notion of the administration is looking

for victories and deals here? Well, I think that's what the market is anticipating. I think that it looked to the UK deal as being a leverage ahead of this coming weekend's Chinese talks. I also think that as our Washington analysis political strategy group indicates that the president is not likely to make broad sweeping agreements, but rather favor piecemeal deals in order to, as well as promises of further negotiations

rather than comprehensive settlements, because then this way he can keep coming back with demands and then float additional tariff escalations in order to get them. So I think don't look for broad sweeping deals, but rather piecemeal things to keep him in the driver's seat. But Charlie, it doesn't sound like the formula for any kind of all clear moment that we can look forward to even if we settle around 10% for most trading partners. Maybe that's what the market was

kind of bracing for going into April 2nd. Remember, we all had an 8% drop in the S&P into that and we're basically right back at those levels. So, you're talking to all your companies, do you think that we can navigate toward a level of tariffs that can be absorbed by the economy here? Yeah, if we could get to 10%, but people are talking about 80% as if it would be acceptable. 80% on China is close to a trade war,

it's close to an embargo, which is an actual act of war. There's no way that we're going to be surviving with an 80% tariff on China. And that would be highly inflationary. 10% is way above what we are at now. It would be inflationary. But 80% I just don't think people should be talking about that, is that if that's a number that anybody's going to live with. So this is still a fraud situation. If you compare this to after election day, the market is only down maybe 3% or 4% with

a real change in the macro environment. Again, long term, I'm bullish on the US, but the next couple of months are going to be very choppy. Yeah, I guess so, you know, with various other things going on, Doge, everything kind of testing the resilience of the of the U.S. economy here. Sam and Charlie, appreciate the time today. Thanks very much.

Let's turn now to lift the stock surging today with gains accelerating during the session, closing higher by nearly 30 percent after last night's earnings report and buyback news. Georgia Bosa has more on this move. Heidi. Mike, it turns out that investors really appreciate a profitable free cash flow positive lift that can return capital to investors you mentioned that share buyback up to 750 million that's up from 500 million previously and that really got the activist investor engine capital to back off of its campaign

So investors certainly rewarding that today with a nearly 30% pop. Even with today's surge though, I got to note that Lyft is underperforming its much larger rival Uber year to date and over the last 12 months. Of course, Lyft is pure ride share, doesn't have any kind of delivery. In terms of the macro, which I know you guys were just talking about, CEO David Risher said today on SquawkBox that he is not seeing any indication of consumer softness. Rides remain durable and resilient. He also mentioned the RoboTaxi threat, which has just been such a big theme for both Uber and Lyft over the last year or so.

And investors kind of now onto the narrative that Uber and Lyft, the the ride sharing guys are going to be partners in this and not totally displaced. We'll see how that rolls out. Of course, we have some very big milestones coming up this year, including the arrival of Tesla onto the scene. Back to you. Yeah, for sure. I mean, it definitely does not seem as if this is a pure winner take all category in terms of the mobility side. And it's still remarkable. You mentioned the performance of the stocks. I mean mean uber still like 24 times the market cap

or so thereabouts of Lyft even though the ratio of revenue is not necessarily as skewed so I do wonder if investors are saying okay you have the buyback coming in whether it's gonna get to huge scale or not Lyft seems to have a cash flow kind of model that's working at the moment. So it is sort of interesting considering at one point it was considered you could kind of dismiss Lyft as a competitor. Right. And I think at one point it was almost like this existential question.

Will Lyft even be around? Could it be bought by someone else? But I think it's kind of established itself as the smaller rival. And as you said, that profitability piece has been so key to investors. I will say though that this is a five billion dollar plus market cap company. It was once worth almost twenty five billion dollars close to the IPO what more than five years ago now so it has come down a lot whereas Uber well above obviously its market cap when it went public around

the same time. For sure yeah there's a lot of disruptive tech type companies where if you look at a five year plus chart, it isn't so cheery. Dee, thanks very much. Appreciate it. Happy Mother's Day. When we come back,

UBS upgrading U.S. equities to attractive on April 11th, and the S&P 500 has rallied more than 7% since that day. Up next, the firm's head of U.S. equities tells us if he thinks the rally still has legs and later we'll talk about Tesla's push higher today as the stock notches its third winning week in a row. Overtime back in two minutes. Markets closing the week mostly lower, but the S&P is up more than seven percent since April 11th. That's the

date our next guest upgraded U.S. equities to attractive. Joining us now is David Lefkowitz from UBS Global Wealth Management. David, it's good to have you on. Good to check in here on this call. Now, markets bottom like April 7th or 8th, that was that mini crash. We got a little bit of forbearance on the tariff side from the 90-day delay by the president. How are you viewing the market right now after we've recovered more than half of those total

losses? And I guess now the stakes are maybe higher in terms of seeing some kind of trade talk progress. Yeah, thanks Michael. I think the backdrop is still fairly constructive. I mean we got some very very powerful and unusual contrarian buy signals in early April. We had a VIX that was one of the highest readings we've seen in some of the highest readings in its history. Investor sentiment was very, very cautious and investor positioning was extremely depressed. And if you just run any numbers on when those things have happened in the past, US stocks typically do quite well over the subsequent 12 months. So obviously, we've seen a little bit of a rebound here, as you pointed out. So I wouldn't get too hung up in the sort of day-to-day. Obviously, there's a lot of wood to chop with the trade negotiations.

Everybody's expecting some slowdown in the data. We're likely to see that. But I would stay focused on the big picture is that those signals are still pretty valid and we think stocks will ultimately kind of grind higher over the next 12 months or so. Yeah, there's no doubt. I mean, all the breadth indicators and people saying

that you get one of these big reversals and sentiment getting really washed out. Definitely it's good implications for six and 12 months ahead, but we are 17% up off the intraday low from April 7th. I think a lot of those studies would suggest that's a pretty good few months worth of gains. And I guess bigger picture, I wonder, conceptually, what's going to get the S&P 500 back to challenging sort of the peak valuations, right?

Don't you need a little more confidence to say that this market should be trading back toward 22 times earnings or something, which is where we fell from. Yeah, I think a couple of thoughts here, Michael. So when we've looked at when the volatility index, when the VIX has come down and now it's back in kind of the normal range, maybe higher end of the normal range, low 20s. When that has happened after a significant spike, you know, usually that means we don't make new lows, right? So I think, yeah, we could be chopping around for a bit, but usually in the coming, you know,

few months, I don't think we're gonna see more than a 5% or so sell-off in markets here. That would be entirely consistent with what we've seen historically. And look, I take your point on valuation. That is true. But we know that valuation is not a good predictor of near-term returns. It's much more powerful when we think about longer-term returns. And so I think what's going to be the more important driver is when do we see the earnings momentum start to improve? And right now, I would say it's sort of coming down, analysts are cutting estimates. As soon as analysts stop cutting estimates,

then the market backdrop is, I think, in a more sustainable rally mode. And we'll probably get there later this year, but that's what I would be focusing on to think about the next leg higher. And where within the market looks like it can maybe lead here? You know, sometimes when you do get a severe correction, you do get leadership shifts or

you get some... the market sort of shows its hand in terms of what comes back the fastest. So where would you emphasize? Yeah, it's been really interesting, Michael. I mean, so, you know, since April 2nd and since the market low, almost counterintuitively, what we've seen is sort of been the secular growth, the AI levered types of companies have been the market leaders off the bottom.

They sort of got hit earlier in the year on concerns about the durability of some of these AI trends. And so I think that's giving us a bit of a signal. And look, we certainly do like a lot of these secular growth companies in the coming years. We just think there's a huge opportunity within the AI ecosystem, and it's not just the technology companies. It's going to be all the infrastructure that's needed to support those companies. So I mean, that's where we'd be focused.

So that leads you to, you know, sectors like tech, like comm services, like utilities, in terms of some of the power needs we're gonna see there. So, I mean, I do think that, look, that's where we're probably gonna get the earnings growth. And ultimately, that's, I think, what you wanna focus on. And then just kind of quickly, in terms of the macro, I mean, is your optimistic view premised on the idea

that we don't end up on recession watch, that essentially we have some kind of clarity or resolution on the trade front that allows us to resume the expansion in a pretty reliable way? Yeah, so I mean, just to be clear, I do think we're gonna see softer data. I mean, so the economy is gonna likely soften

before things get to a sort of recover, I guess. The issue is the market is already anticipating that, and we know that this softness is largely man-made. It's a policy choice that the administration is pursuing. And I think they gave us a signal with the tariff pause that they really would like to avoid sending the economy into recession. And so as long as you sort of keep that in the back of your mind, I think the administration is going to continue to take actions that will tend to avoid going into recession. Obviously we don't know exactly,

but I think there's a good reason to have that as your base case, that no recession, sort of a soft landing, if you want to call it that. But yeah, fully would agree, Michael. I mean, if we did have a recession, yeah, our sort of more optimistic take would not be correct. Sure. Got it, yeah, our sort of more optimistic take

would not be correct. Sure. Got it, David, I appreciate the time today. Thank you, David Lefkowitz from UBS. After the break, former Ford CEO Mark Field says Tesla's pop today isn't just about trade optimism. He'll break down two more reasons

why the stock just logged its third winning week in a row. And we just heard the bull case for stocks, but ahead, Warren Pies from 314 Research tells us why he's turning a bit cautious on the market. Welcome back, Tesla shares higher today, capping a third straight week of gains as investors digest the trade deal framework with the United Kingdom

and what it might mean for future deals. The stock now trading above its 200-day moving average as well. Joining us now is Mark Field. He's the former CEO of Ford and a CNBC contributor. Mark, it's great to have you on. I've been doing this a long time. I've kind of learned that you can only kind of make it

educated guesses about what actually animates Tesla shares. And obviously if the faithful just get excited about something, of course, coming off a really bad quarter, the stock has recovered a fair bit. But what's your read on this matrix of matrix of factors that could be influencing Tesla sentiment right now? What seems at work? Well, Michael, you're exactly right. You know, with Tesla, the fundamentals don't really apply to the drives the stock. It's really a number of other things. And I was thinking about this the other day, an analogy. It's's like. You know Tesla's stock price in their market cap

it's it's like going on a Tesla road trip right. It's fast it's thrilling- it's a little bit unpredictable. And it sometimes has to go down to charge for a while. And when you think about the things that are driving the stock literally

since the earnings- call a couple of weeks ago. Is you know one is market sentiment. Second is what's happening with trade and tariffs. And we saw today, you know, Trump making some comments before the secretary of the treasury meets with the Chinese officials this weekend. That could put a positive spin on it, because although Tesla produces all of their vehicles for the U.S US here in the US, they still import a number of important components from overseas and from China.

So anything that goes down on the lower tariffs would help Tesla. I think also must return to the White House or return from the White House to spend more time more focused time on Tesla is energizing investors. And then finally, it's their big bet on RoboTaxis. They confirmed in their earnings call last week or the week before that they were on track for summer launch. And that could be very big for them or it could not.

So I think those are the things that are driving the stock these days. Yeah, RoboTaxi could be big for them, but the anticipation of RoboTaxi is more likely to be good for the stock than not. It's usually the pattern these days. Yeah, Robo taxi could be big for them, but the anticipation of Robo taxi is more likely to be good for the stock than not. It's usually the pattern with Tesla. And I guess even just the idea of, you know, less hostile posturing between the U.S. and China probably is better for Tesla than not, given its importance of that market to Tesla.

You know, more broadly here, we're talking about lots of differences between different manufacturers and how they might be impacted right now. We also heard after the UK deal was struck yesterday, which is going to basically allow UK automobiles into the country with a lower tariff rate than many US-based manufacturers will be able to deal with just because they're content made in Canada and Mexico. Is this sustainable to have all these different sets of rules? Well, first off, it's very complex, right? So you're going to have the management teams of these automakers spending a lot more time, non-value added time for either the product or the consumer, figuring out these complex

tariffs. But I think in the case of the UK,US at least framework that they announced, this is not a good template for, let's say, the Detroit automakers. Because as you said, you literally could now import a UK automobile, let's say a Range Rover that has very little US content, cheaper than you can for a vehicle made in Mexico that meets the USMCA agreement and maybe has 50% US content. So that is not a good template for countries like Japan and in case of South Korea, Hyundai and Kia, that could put them at a huge competitive disadvantage with the domestic OEM. So it's not a great template.

It's a good deal for the UK You know, I'd put it as you know, the US and UK just you know Swap the slow lane for the HOV lane with you know, less tariff traffic and you know more collaboration But there's gonna have to be different constructs and to your point. It's just gonna be very very complex meantime Quickly mark. I mean the company's dealing with all these challenges and yet sales activity has been pretty good, better than expected. And I guess a lot of that is just

people getting in front of it. You're seeing used car prices also go up. So maybe that's a cushion for now. Yeah, it's probably a cushion for, you know, just a period of time, right? We saw the market get juiced in March and April. The

seasonally adjusted selling rate went over 17 million units in both those months. That's the first time it's done it in a number of years. And I think a lot of that was people just rushing to buy pre-tariff vehicles. You've seen that in, as you said, used car price residuals going up. But I think you're actually starting to see that fade

in the early days of May, where, you know, inventories are starting to come down. They're down about 10 percent month over month. But I think it was a little bit of a sugar rush of sales and a little bit of pull forward and the industry is going to pay a bit of a price for that. Yeah, I guess probably come down time. Mark, appreciate the time today. Thanks very much. You bet, thanks Mike. All right, after the break, nuclear stocks getting a late session pop

after a report signaled change could be coming from Washington. Those details are next. And don't miss our interview with the head of Amazon Prime Video and MGM Studios, Mike Hopkins, on sports streaming, Hollywood tariffs, and the future of the James Bond franchise. Overtime will be right back.

Welcome back to overtime nuclear stocks. Getting a pop late in the session. Pippa Stevens is here with more. What is behind that move? Hi Pippa. Hey Michael, we did see nuclear stocks, including Cameco, Oklo and New Scale getting a

lift after the New York Times reported. The White House is considering several executive orders aimed at speeding up the construction of nuclear plants with the report saying potential actions could include overhauling the Nuclear Regulatory Commission and having the Department of Defense take a more prominent role. The order would also set a goal of quadrupling the size of the US nuclear fleet to 400 gigawatts by 2050 said the report which the White House has not confirmed. Now this is not all

that surprising given President Trump has called nuclear energy great and pledged to roll back red tape and permitting for energy projects more broadly. Additionally, Energy Secretary Chris Wright was previously on the board of Oklo and on numerous occasions has touted nuclear's importance to the overall energy mix. But the problem still remains one of cost. It is very expensive to get a reactor built and despite all the buzz around SMRs there is still challenges around securing financing for those first-of-a-kind technologies Mike. For sure. By 2050 I mean maybe that's even ambitious for

for doubling. All right Pippa thank you very much. Breaking news now on the outages at Newark Airport. A report this hour says the FAA is weighing a broad pullback in Newark flights over recent radar outages, including one overnight that lasted roughly 90 seconds. Joining us now on the news line is former United Airlines CEO and CNBC contributor Oscar Munoz Oscar. It's great to

have you jump on here. So just what's your? What are your top level thoughts here on the implications of this potential move by the FAA? You know, to some degree high by everybody, it is a mess out there. And I think what you have to understand is this broader pullback just pulls the rest of the people that fly in and out of EWR, where United has already taken, I know we've lost track of the numbers, but probably close to 100 flights down, one to the construction

that's going on for the runway, and then an additional 35 recently because of these concerns with the shortage of air traffic controllers. The systems issue is yet another contributor to that that's led to even more shortages of the folks. So it's a bit of a mess. It's a full circle. And a broader pullback just, in essence, suggests to the other airlines that they have to pull back as much to some degree as United has in its main hub.

And I suppose for United there are really limited options in terms of using other airports to take up some of the slack in this market? Well I you know think of parking spaces parking spaces at all the airports are pretty full and so there's you're not going anywhere else. I think United's flying into LaGuardia as much as it can and there's just no way of doing that uh... you can bypass folks and go to other you know other locations like dvd but no it's a new york a big headquarters for a lot of folks and

that there's not a lot of implications other than reducing what we call flow in order to get to allow the a traffic controllers to do what they need to do which they're not able to go back antiquated systems, which the system outage that you've seen briefly is part of that issue. Those antiquated systems, I mean, to what degree is it either unique to Newark or exacerbated by other things going on at Newark? Our country is severely behind on air traffic control systems, and we as an industry have been – all of us have gone through the details on that and that's a broader

somewhat political funding multi-administration issue but with regards to this particular instance at Newark New Jersey there's these areas called TRACONS which are units in essence radar units that are situated around the country. The Philadelphia TRACON is the one that are having these systems issues, and that affects EWR, Teterboro, which is the private facility there in New York, doesn't affect LaGuardia and JFK because there I think they're run out of somewhere north, I forget the exact location of the other one. So that's why the difference.

And so, flying to New York, LaGuardia and JFK right now is just fine. It's just EWR that's the issue. And is there anything that a company like United and CEO of that company could do to move things along or try to invest in a way that can help or is it just the FAA has to figure it out? No, it has been a multi-year approach by the airlines in total to modernize air traffic control systems in this country. If you go back to the history, go back to any speech or mark I've given, it is, at one point in time there was 60 countries in the world that

had better, more modernized systems that we do. And again, it's a complex issue. It's very expensive. It's going to take a long time. So it's not just one administration that has to support it, it has to support over two, possibly three administrations. It's how long it's gonna take to make this work, but you gotta get started. You gotta fund it, and you gotta fund it in a long-term way, and our mechanisms

and budgetary process for the government just don't work that way. So it is complicated, and it's not an individual or a person, and we sure hope that we begin to take more actions than just words, because every time this happens, there was, oh, we need to do something, and then nobody does.

And again, it's easy sitting from the sideline as I am, but it's an infrastructure issue, just like everything else. Sure, yeah, easy not to do much until you get a little bit of a crisis. Oscar, thank you so much. Appreciate you jumping on. All right, everybody have a good weekend and safe travels.

Thank you. All right, time for a CBC News Update with Bertha Coombs. Hi Bertha. Hi Mike. The U.S. Embassy in Kyiv is warning of a quote, potentially significant air attack in the coming days. The embassy said on its website today that it received information that the strike could happen at any time and warned U.S. citizens to be ready to seek shelter.

It comes as Ukraine's foreign minister said Thursday that Russia violated its own three-day ceasefire just after it went into effect. The Pentagon has directed all military leaders and commands to pull all library books that address diversity, anti-racism, or gender issues by May 21st. It's the most detailed directive so far on Defense Secretary Pete Hegsit's agenda to remove DEI programs from the military. And Democratic Newark, New Jersey Mayor Ross Baraka was arrested today at an ICE detention center where he was protesting its opening. In a social media post, the interim U.S. attorney for New Jersey, former Trump lawyer Alina

Haba, said the mayor trespassed and ignored warnings from ICE agents to leave. The mayor's office has yet to comment. Mike? Bertha, thank you. Right up next, Amazon's head of prime video and MGM studios on President Trump's tariff threat against foreign-made films and how that could impact the next James Bond movie. Plus 314 research founder, Warren Paez, on why the upcoming China trade meeting may be a sell the news event for the market. Hollywood studios in the spotlight this week

after President Trump proposed tariffs on film production shot outside the US. Joining us now to talk tariffs and more is Amazon's head of prime video and Amazon MGM studios, Mike Hopkins, along with our Julia Borstein. Julia. Thanks, Mike. That's right, I'm joined now by Mike Hopkins along with our Julia Borstein. Julia. Thanks Mike. That's right. I'm joined now by Mike Hopkins here on the Amazon Prime Video lot in Culver City and it's worth noting that you oversee the largest ad-supported subscription

streaming business in the world and you've made a big commitment to invest in entertainment from theatrical releases. You're increasing the number of films you're going to release theatrically. You've invested in a number of sports rights, pricey TV shows like Lord of the Rings. Give us a sense of where you see prime video fitting in to the streaming ecosystem. Are you competing directly with Netflix? Well, you know, we like to think of ourselves as playing a much different game than most other streamers.

So, you know, when you think of what we we have we offer live sports, we offer original programming, news, we have news channels, we have a lot big library, but in addition to that we've got the world's largest selection of rent and buy movies. We have the largest segment market share in that in the world. We offer a variety of other streamers right in the Prime Video app. So what we're trying to really be is, you know, people's first choice entertainment destination when they turn to streaming, and that's really our strategy. So not just about subscription streaming,

but also the place you can go to buy movies, sort of that hub for also places where you might subscribe to other streaming services. But what's really interesting to me is from an advertising perspective, you just launched ads in January of last year. And Morgan Stanley estimated you brought in over $3 billion in ad revenue last year and that you'll more than double that to over $7 billion next year.

Who are you competing with for ad dollars? Well, you know, advertising is a big market. You know, Amazon launched advertising on Amazon.com many years ago, and so we're obviously very large in sort of the performance marketing retail shopping business. We had a video about three years ago with IMDB TV which became FreeVee and then most recently with Prime Video. So we sort of compete with everyone but what we're really trying to do is offer a different selection and different solution for advertisers. So now with Prime Video with the scale that we have you've got the upper funnel for brand

advertisers all the way to the have, you've got the upper funnel for brand advertisers, all the way to the performance marketing you would get on Amazon.com. And then increasingly we're able to do shop to show on Prime Video where we're doing both right within our app. Mike. Yes, thank you, Julia.

Mike, we mentioned the threat by the president to tariff non-US made films, whatever that might mean. I'm just wondering how you're thinking about that, but also in the context of really a lot of concern in the industry that so much production has gone elsewhere. Yeah. Well, this is obviously fresh. It's only been this week when that news is broken. The White House has talked about thinking through this and spending more time with the industry.

We're looking forward to talks with the administration to understand what the issues are and how we can solve them. But you know, we're an industry collectively that's got a $15 billion trade surplus. We're a net exporter of entertainment around the world and we also support 2.3 million jobs here in the United States. We're here in Culver City. I've got sound stages right behind me where we're shooting a movie today. So we do a lot of production here in California and

around the United States already and so but we're eager to sit down and understand how we can make it even better. The other question about tariffs is how they might impact the ad market and I know you're going to the upfronts next week where you're going to be showcasing all of the content that you've invested in including a lot of sports content which is very expensive. Are you concerned about a softening ad market, and how does that play out given your big investment in sports? Well, you know, advertising's cyclical.

This is only our second up front. We had a big year last year. We're expecting another big increase in revenue in 2026 and the rest of 2025. And so we're bullish about where we are with our solutions that we have for advertisers. Sports is a major part of that. You know, we have NASCAR starting later this month. We've got the NBA starting in the fall along with Thursday Night Football again here in the U.S. We also have sports around the world. We've got Champions League throughout Europe and football down in Latin America, French Open in France. So it's a big part of our strategy. But from an advertising perspective, it's the one thing that you know you can get generate large audiences and it becomes a

big part of your sales package. Well, unfortunately, I think we're out of time. So I'm going to toss it back to Mike over in the studio. Julia, thank you so much. And thank you to Mike Hopkins as well. Apartment rental turnover is at a record low and that could be creating a big opportunity to invest in one group of stocks. Details on that straight ahead. And be sure to check out End of the Road, a new CNBC investigation into how foreign criminals are crippling America's supply chain through cargo theft. You can watch it right now on CNBC.com. We'll be right back. Home affordability and lack of supply are just two of the many factors driving record low apartment turnover rates, and that could be creating a big opportunity to invest in REITs.

Diana Olak is here with the details. Hi, Diana. Hey, Mike. At the low turnover rate is, quote, striking, according to Piper Sandler analyst Alex Goldfarb, with some of the largest landlords seeing turnover at just 30% compared with the industry norm of 50%. He cites the following reasons. An unaffordable for sale market, which we all know, lack of rental supply on the coasts, and then nervousness about the economy, tariffs in particular. That leads to the cost of moving and then a shift to suburban

apartments, which tend to be larger and more comfortable. So you don't want to move. Now, the result is that landlords are getting better pricing for manuals since people don't want to leave. And that also improves cash flow for landlords because of the lower turnover costs, i.e. they don't have to repaint. Now, Goldfarb likes Essex Property Trust with its large West Coast footprint and equity residential in that space as well. He notes the rebound of San Francisco and Seattle in particular, driven by AI and Amazon's return to office mandate. Now, all of that is playing out in real time on the West Coast. He's neutral, though, on the Sun Belt, which had been a hot pandemic play. Names like Camden and Mid

America Apartments had strong performances in Q1, but could be hit hardest if there is a job loss recession. As for the overall market, rents actually are now rising again after falling last year, and vacancy rates are coming down, Mike. All right, we'll see what that means for lots of things like inflation readings in the months ahead. Diana, thank you so much. Appreciate that. The major average is snapping a two week win streak. Up next, 314 Research found a war in pies

on why he's becoming more cautious on the market. And get out your smartphone, scan the QR code on your screen to sign up for the Fast Money Live event on June 5th at the NASDAQ. It'll make the perfect gift for Fast Money fans in your life. Got some breaking news on the debt limit. Let's get to Eamon Javers with that. Eamon. Hey there, Mike. A new letter from Treasury Secretary Scott Besson to Congress. Just within

the past couple of minutes in it, the Treasury Secretary is saying after reviewing receipts from the recent April tax filing season, there is a reasonable probability that the federal government's cash and extraordinary measures will be exhausted in August while Congress is scheduled to be in recess. Therefore," he writes, I respectfully urge Congress to increase or suspend the debt limit by mid-July before its scheduled break to protect the full faith and credit of the United States." And that sets up an interesting situation, Mike, as they move on Capitol Hill to pass this enormous tax cut bill, also now in the mix is going to have to be a hike or elimination

of the debt ceiling. So that's something else for Congress to pay attention to in the coming months. Yeah, it seems like it's going to be busy with these hurdles in the next few months. Amon, thank you very much. Joining us now is Warren Pye, 314 Research Co-Founder and Strategist. Warren, great to have you here. Just love a check-in on how you're feeling about the comeback in this market.

You were telling folks not to kind of de-risk near the lows and you said, look for, or be open to opportunity. Where does that leave us now when we've gained back more than half of the losses? Yeah, thank you for pointing that out and having me. Basically, yeah, we were saying, don't panic at the lowest, the world's not ending. We saw opportunity in the market there.

But here we are at almost on the doorstep of 5,700 on the S&P 500. We're back to where we were pre-liberation day. And I just don't know that that is justified with the news flow that we've gotten. And I understand markets move before the news oftentimes, and I understand the power of some of the technical signals we've seen. But this is shaping up if you're going to be bullish here. Like this is a V-shaped recovery. Most V-shaped recoveries, when you go back and study history, require some kind of policy response from either the Fed or fiscal.

And we're not getting either in this case. The Fed is on hold and they're recalcitrant as we've called them. And we're not getting anything from policymakers. And we're just hearing now about debt-suling stuff. So I don't think it's, I think we're shaping up for a little bit of a swoon here. And I think we're carving out a trading range

as we kind of digest some of the uncertainty. And I think we're the top end of that range. So yeah, I'm cautious here. Yeah, you mentioned the debt limit news we just got. I mean, it really sets up the summer as being packed with these things that we're gonna have to wrestle with. Obviously, it's gonna be the end of the 90-day pause on those reciprocal tariffs as in July.

Debt limit, gotta get a budget through. And then the Fed is probably going to have to be at some kind of a decision point in that range. I guess the market's expecting something perhaps in July. So do you think the market's going to have to to go all the way back to the lows under the weight of all that? Or can we fight our way through?

Well, look, let me put this little context. If this is just a bear market rally, it would be significant. And we've already retraced more than 50% of lows. This would be the 10th largest bear market rally we've seen going back on record. But it's not unprecedented. In a bear market rally would mean we do go back to the lows. I think it's going to depend a lot on the economy.

That's why I think it's right now the base case is a trading range, not quite back all the way to the lows. And we're going to have to watch the economy and whether this kind of the tariff drama and everything else you just mentioned starts to weigh on consumer behavior in the real economy. If that shows up, then yeah, I think we're not just going to the lows that we've seen, but below those. So it's a two-step process, trading range, wait and see what happens to the economy.

If it deteriorates, then yeah, we break down. But I don't think there's any upside, which is really the important point today. You called the Fed recalcitrant at this point. Of course, we heard from Jay Powell on Wednesday, the Fed flagging this kind of stagflationary type risk, two-sided. They don't want to choose one or the other as being more important right now. How would they behave right now if they were not being recalcitrant in your mind? I? Think they would be either cutting or really setting up for a June cut They would have cut in May or they would have been setting up for a June cut instead I think there's a good chance. We don't see a Fed cut until September and so

It because they they've gone from proactive to, and it seems like a subtle shift, but it's far from subtle. They cut 100 basis points last year as they were trying to get out in front of the data, and they're now saying the data's gonna have to move before we move. It's a very important distinction for equity investors, and so I think it's probably pushed them back three months

to see where this thing see how this thing lands. I guess you can go back to when they were fighting inflation and they would say, look, we're not gonna react to one inflation print. We need at least three months of improvement before we get less hawkish. I mean, in that sense, I guess that's part of their calculus.

But just quickly, I'd love you to weigh in on oil here. It obviously bounced off these lows below 60 on WTI. Where does it seem to go from here? I'm bearish on oil, we've been bearish on oil. I think this is a supply driven decline, you see that in the crack spreads widening. If we're right in the economy is going to weaken some here, then you're going to get another leg down because of demand. And so I think this is really an OPEC driven decline due to the supply that's coming back on the market. Seeing weird things in the curve, the futures curve we haven't seen since COVID. And so I know there's like a touristy impulse to buy oil sensitivity here because it's down, but it's too early.

Yeah. It can be dangerous being a tourist in the crude markets. Warren, thanks so much. Appreciate the time today. Have a great weekend. That's going to do it for overtime in a week when the S&P was down about one half of 1%